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Facebook plans to cooperate with a number of financial companies and e-commerce companies including Visa and Mastercard, relying on the world's largest social network foundation laid by Facebook, to launch a stable token-based payment platform project code-named "Libra". This week's topic will analyze the status quo of global cashless payments and discuss the development prospects of the Libra project.
Summary
Summary
Feature: Transforming payments and e-commerce will be the only way out for Facebook. Facebook hopes that blockchain-based payment services will bring new financial services revenue and attract more brands to advertise on Facebook. Consulting firm Capgemini (Capgemini) predicts that the number of global cashless payment transactions will increase from 598 billion to 876 billion between 2018 and 2021. The compound annual growth rate in Asia will reach 29%, and other regions will also maintain a growth rate of around 10%. speed up. Facebook will face "multi-faceted attack" from traditional finance and mobile payment. The United States has the largest scale of cashless transactions, and the development of mobile payment is slow; China has become a giant in the field of mobile payment due to its imperfect credit system; Japan is still a "cash" society with a high cash usage rate; and emerging markets are blockchain technology The best "experimental field", blockchain payment may be the first to be popularized in emerging economies. Facebook's stable token plan still faces risks from foreign exchange, blockchain, and encrypted token regulatory policies in different countries or regions.
Market: The total market value of the blockchain has reached a new high, and the blood-sucking effect of BTC is significant. The total market value of digital tokens this week was US$185.26 billion, an increase of US$14.3 billion or 8.4% compared to last week. The average daily turnover was 45.05 billion US dollars, a decrease of 7.7% from last week, and the average daily turnover rate was 25.7%, a decrease of 1.9% from last week. The current price of BTC is US$5,768, with a weekly increase of 9.3% and a monthly increase of 16.0%; the current price of ETH is US$167.9, with a weekly increase of 7.4% and a monthly increase of 4.0%. . The BTC balance on the exchange was 761,000, a decrease of 13,441 from last week. The balance of ETH on the exchange was 8.366 million, a decrease of 267,000. In the process of rising, along with the net buying of chips, the selling pressure is relatively reduced.
Risk warning: market volatility risk
Risk warning: market volatility risk
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As early as December 2018, Bloomberg reported that Facebook is planning to launch a blockchain-based electronic currency and payment system, which will be applied to the instant messaging software Whatsapp. Recently, this mysterious project has unveiled another layer of veil. According to sources, Facebook plans to cooperate with a number of financial companies and e-commerce companies including Visa and Mastercard to launch a stablecoin based on the code-named "Project Libra". It will rely on the foundation of the world's largest social network laid by Facebook to promote the stable pass to more users. The plan has been carried out in secret for a year.
1 Topic: Demystifying Facebook’s Stable Token Libra
Facebook CEO Mark Zuckerberg said that payment and e-commerce will be the only way out for Facebook. Facebook's current business model is to provide value-added services and place advertisements. Zuckerberg hopes that after the blockchain-based payment service becomes popular in Facebook's App, it will bring new financial service revenue and attract more brands Facebook advertises. Considering that Facebook's user groups are all over the world, and the development status of cashless payment in the user's location is also different, Facebook will face "multiple attacks" from traditional finance and mobile payment.
1.1 Status of Global Cashless Payment
Cashless payment covers mobile payment, credit card, debit card, check, credit transfer and other payment methods. Consulting firm Capgemini (Capgemini) predicts that the number of global cashless payment transactions will increase from 598 billion to 876 billion between 2018 and 2021. The compound annual growth rate in Asia will reach 29%, and other regions will also maintain a growth rate of around 10%. speed up.
United States: Largest scale of cashless transactions, slow development of mobile payments
Due to the popularity of credit payment, the United States is the country with the most cashless transactions in the world. According to the "World Payments Report 2018" jointly released by Capgemini and BNP Paribas, the number of cashless transactions in the United States in 2016 was 148.5 billion, accounting for about 30% of the total number of transactions in the world. But it is precisely because of the maturity of the credit card system that the development speed of the United States in the field of mobile payment lags far behind China, an emerging market. In 2016, the total amount of mobile payments in China reached a staggering $9 trillion, 80 times that of the United States during the same period.
Checks have a history of more than 350 years in North America. Credit cards also originated in some large department stores in the United States. They issued a credit "certificate" similar to a metal card to customers, allowing customers to shop on credit; in 1952, the Franklin National Bank of California issued The world's first credit card. Many payment discounts and preferential policies in the United States are tied to credit cards, and its credit card transaction volume accounts for 40% of the world. This is one of the reasons why Facebook needs to cooperate with credit card giant Visa to enter the mobile payment field. Although credit cards have the advantages of credit payment, low fees, and fast payment speed, their application scenarios are limited to consumption. In contrast, Facebook's Libra also allows peer-to-peer transfers between users.
In addition, the United States is one of the countries and regions with the highest Internet penetration rate. In 2017, the per capita e-commerce market expenditure in the United States was US$2,270, but only 20% of consumption was made through mobile payments. As the country with the most popular cashless consumption habits, the United States lacks peer-to-peer payment methods between mobile payment and users. It is undoubtedly the most important target market for Facebook’s stable token.
Europe: Significant differences in payment methods
Sweden and Finland in Northern Europe are the regions with the largest number of mobile payments per capita in the world and the highest growth rate at the same time. There are certain gaps in the level of cultural and economic development among European countries, and consumers also have obvious regional differences in the choice of payment methods. For example, in the Netherlands, the online bank iDEAL is more popular than mobile payment and bank cards; in Poland, consumers prefer the local fast transfer service PayU; in Russia, people prefer mobile wallets such as GooglePay and Apple Pay. Central Europe, together with emerging markets such as East Asia and the Middle East, is the main force driving the rapid development of global cashless payment. In 2016, the growth rate of cashless payment in Russia reached 36.5%.
China: A giant in mobile payments
Statistics show that in 2016, China's mobile payment totaled US$9 trillion, and it is expected to reach US$47 trillion in 2020, firmly ranking first in the world. Apple CEO Tim Cook put forward the following views on the dominance of mobile payment in China: China has not experienced the stage of desktop Internet, but has directly embraced the mobile Internet, and Chinese consumers do not have the obsolete baggage of the desktop Internet era in their thinking. Thanks to China's rapid economic growth and emphasis on infrastructure construction in recent years, the popularity of smartphones and 4G networks has also provided conditions for offline mobile payments.
The absence of a sound credit system is another important reason why mobile payment can open up market space in China. According to a statistics from Goldman Sachs, China has 4 bank debit cards per capita, but the per capita credit card holdings are only 0.33. On the one hand, Chinese consumers have not developed the habit of paying with credit cards and checks in Europe and the United States. Under the guidance of the central bank's policy, China's commercial banks provide debit card services to ordinary customers regardless of cost; on the other hand, China lacks laws related to electronic payment, and third-party mobile payment institutions can Bypassing UnionPay's fund settlement platform, its transaction transfers are out of supervision, creating conditions for the barbaric growth of third-party payments. It was not until 2017 that the central bank required third-party payment institutions to access a unified online platform.
Compared with the United States, China's mobile payment is more popular and has more comprehensive functions. Due to factors such as regulation, Facebook's stable pass is destined to be difficult to enter the Chinese market.
Japan: Still a "cash-rich" society
Although the penetration rate of mobile Internet in Japan is very high, the proportion of cashless payment is relatively low. The cash usage rate in Japan far exceeds that of other developed countries. A considerable number of restaurants and supermarkets only support cash payments, and convenience stores even have machines dedicated to coin change. Japan is also a country prone to earthquakes and tsunamis, and power outages occur from time to time. After the Great Hokkaido Earthquake in September 2018, the power in downtown Sapporo was cut off for more than a week, and electronic payment devices were unavailable. Japanese people also place orders online and pay offline to pick up the goods when shopping on e-commerce websites.
According to statistics, in 2017, the per capita e-commerce expenditure in Japan was US$1,158, but mobile payment accounted for only 3%. The current situation that Japanese people prefer to use cash is difficult to change.
Emerging Markets: Opportunities and Challenges
Mobile payment is experiencing a stage of rapid development, while its prospects are still full of uncertainties. The development of mobile payment systems not only faces the complexity of technology and regulation, but also faces the obstacles of traditional financial institutions that do not want the payment field to be encroached. Therefore, consumers in emerging markets with imperfect financial infrastructure and difficult for traditional financial companies to reach will become the main force driving the growth of mobile payment scale in the next few years. Just as China, which is far behind developed regions in credit card consumption, is at the top of the wave in the field of mobile payment. Emerging economies that lack financial facilities and means of payment may become the "experimental field" of blockchain payment technology and the first market to usher in explosive growth.
Rumor has it that Facebook’s blockchain stablecoin will be launched first in India. A series of "cash-free" reforms in India in recent years have also greatly reduced people's trust in the Reserve Bank of India. At the same time, India's mobile payment is still in its infancy. People don't know what payment tools they need, perhaps digital Tokens can bring about changes in the means of payment for people in emerging economies.
1.2 Rising demand for cross-border payment
Facebook's stable pass may also be used for cross-border payments. Facebook, including its WhatsApp, Messenger, and Instagram, has 2.7 billion users all over the world. If users from different regions are allowed to transfer money, then whether the stable pass is anchored to the US dollar or a basket of currencies similar to SDR is anchored. Topics that need to be discussed and regulatory issues are inevitable.
At present, the four main tools in the global cross-border payment market are bank wire transfers, remittance companies, international credit card organizations, and third-party payments such as Paypal. The SWIFT channel is uniformly used for bank wire transfer, which has high handling fees and takes 3 to 5 days to arrive, which is suitable for large-value transfers and remittances; international credit cards usually use the US dollar as the settlement currency, which can be used for credit consumption, but has higher credit requirements for cardholders; Third-party payment companies mainly serve application scenarios such as small amount and high-frequency cross-border consumption.
In recent years, in addition to traditional import and export trade, new cross-border payment scenarios such as overseas e-commerce purchasing, outbound travel, and overseas study demand have risen rapidly. The compound growth rate of the transaction scale from 2012 to 2016 was 25%. Their characteristics are Small amount, high frequency. A payment system based on stable tokens can reduce the unavoidable frictional costs of third-party payments and become another option for cross-border micropayments.
1.3 Advantages and risks of stable tokens
Stable tokens are a type of digital token whose value is anchored through a specific mechanism. There are mainly three stable modes: mortgage real assets, mortgage digital assets, and algorithmic bank adjustment. Facebook's Libra is likely to adopt the first model, pegging the value of its stablecoin to a basket of foreign exchange reserves.
Stable tokens and the underlying blockchain technology can greatly reduce the additional frictional costs incurred in traditional financial payments and improve transaction efficiency. Usually, the blockchain transfer fee only accounts for 0.1% of the transaction amount, and the confirmation time is usually about a few minutes to half an hour, which is unmatched by existing cross-border payment methods.
Stable tokens were originally a legal currency equivalent created by digital token exchanges in order to avoid regulatory risks and avoid legal currency deposits and withdrawals. It provides an ideal measure of value for investors in the secondary market and acts as a medium for transactions. People quickly discovered the function of stable pass as a means of payment. Its price is relatively stable, the fluctuation is much smaller than other digital assets such as BTC, and it can be easily exchanged with other digital assets. Stable pass is also used for Fund transfer across exchanges, over-the-counter trading of digital assets, etc.
However, stable tokens anchored to fiat currencies are highly competitive and homogeneous. At present, the USDT issued by Tether accounts for the vast majority of the transaction volume in the secondary market, and stable tokens still have no mature application scenarios outside the secondary market. Facebook's Libra plan will be a bold attempt in the field of mobile social networking and e-commerce, but this plan involves blockchain and foreign exchange regulatory policies in different countries and regions, making it difficult to implement.
2 Quotes: BTC is close to an important resistance position
2.1 The overall market: the total market value has reached a new high, and the blood-sucking effect of BTC is significant
The total market value of digital tokens this week was US$185.26 billion, an increase of US$14.3 billion or 8.4% compared to last week. BTC once again hit a new high of $5,911 (Huobi Global price), and mainstream tokens such as LTC and ETH also rebounded, but they still fell by 15% to 20% from the high point in early April, and failed to continue to hit new highs. The limited incremental funds of BTC are not enough to support the general rise of the market, and the funds are concentrated in BTC, which has a blood-sucking effect on other tokens.
The average daily trading volume of the digital token market was US$45.05 billion, a decrease of 7.7% from last week, and the average daily turnover rate was 25.7%, a decrease of 1.9% from last week, continuing to shrink and rise. Market activity has decreased.
This week, the BTC balance on the exchange was 761,000, a decrease of 13,441 from last week. The balance of ETH on the exchange was 8.366 million, a decrease of 267,000. In the process of rising, along with the net buying of chips, the selling pressure is relatively reduced.
The USDT market cap is $2.78 billion, a decrease of $37.8 million from last week. The price of USDT was $1.001, and fell to as low as $0.99 within a week due to the incident of Tether funds embezzled by Bitfinex. Bitfinex plans to issue platform pass financing to make up for the loss of about 850 million US dollars.
2.2 Core tokens: BTC continues to be strong, and mainstream tokens follow the rebound
The current price of BTC is $5,768, with a weekly increase of 9.3% and a monthly increase of 16.0%. This week, the average daily trading volume of BTC was 14.4 billion US dollars, and the average daily turnover rate was 15.0%. BTC hit a new high of $5,911 this week and remained volatile above $5,600. BTC is close to the early transaction-intensive area of 6,000-6,200 US dollars, and the resistance is relatively large, and the possibility of price fall in the short term is relatively high.
The current price of ETH is $167.9, with a weekly increase of 7.4% and a monthly increase of 4.0%. This week, the average daily trading volume of ETH was 6.10 billion US dollars, and the average daily turnover rate was 35.8%. The monthly increase of ETH lags behind that of BTC, and the trend is weak.
The current price of EOS is $5.08, with a weekly increase of 7.2% and a monthly decrease of 2.7%. The average daily trading volume of EOS this week was US$1.78 billion, with an average daily turnover rate of 39.3%. EOS has a relatively large correction, and the trading volume has shrunk severely. Due to the influence of BTC's blood-sucking effect, it is expected that the adjustment time will be relatively long.
The current price of XRP is $0.308, with a weekly increase of 3.3% and a monthly decrease of 9.9%. The average daily trading volume of XRP this week was $950 million, with an average daily turnover rate of 7.5%. XRP is still in a downtrend and it is recommended to avoid it.
This week, the monthly volatility of major tokens fell, and the overall volatility in the past 30 days was not large. The monthly volatility of BTC was 11.6%, down 7.3% from last week; the monthly volatility of ETH was 16.7%, down 4.8% from last week The monthly volatility of EOS is 19.8%, down 5.8% from last week; the monthly volatility of BCH is 26.5%, down 19.6% from last week. The market is facing an important pressure level, and both volatility and trading volume have slowed down.
2.3 Market view: fish tail market, do it and cherish it
BTC hit a new high, approaching the $6,000 mark. In the past two weeks, despite shrinking BTC technical transactions and divergence of major indicators, it still maintained an upward momentum, rising to a maximum of $5,911, hitting the $6,000 mark. 6,000-6,200 US dollars is the intensive transaction area in the early stage, and it is difficult to break through in the short term, and it is necessary to repeatedly attack this position. The target price of this round of rise is 6,000 US dollars, and the room for further upward movement is relatively limited. The current round of rising market has entered the fishtail stage, and there is a certain risk of a callback. BTC continues to rise and needs to be reduced in batches. In the medium and long term, we are still optimistic about the trend of BTC and the development of the blockchain industry. It is only a matter of time before recovering $6,000.
The mainstream tokens other than BTC have suffered serious blood loss. ETH has only increased by 4.0% in the past 30 days, and EOS has fallen by 2.7% in the past 30 days, both lagging behind the 16-point increase of BTC. The proportion of BTC in the total market capitalization has increased from 50% in early April to 55%. Small and medium-sized market capitalization tokens have lost more blood. The funds in the market are concentrated in BTC, pushing its price all the way up.
The decline of USDT may be an opportunity to deposit money. Affected by the news that Bitfinex embezzled Tether’s USDT reserves to make up for losses, the domestic OTC trading price of USDT dropped from 6.92 yuan to a minimum of 6.65 yuan. It is reported that Bitfinex will raise funds through the issuance of platform tokens to make up for this loss. A document released by Bitfinex shows that its annual profit is about 400 to 450 million US dollars. Investors do not need to overestimate the impact of this incident on Tether’s solvency. Influenced by the impact, being able to buy USDT with a lower price has become a rare opportunity to enter the market.
3 Output and popularity: Computing power has rebounded significantly, and public attention has declined
The BTC computing power rebounded significantly, and the mining difficulty remained the same as last week, while the ETH computing power and mining difficulty rebounded slowly. The mining difficulty of BTC this week is 6.353T, the same as last week, and the daily average computing power is 50.1EH/s, an increase of 4.9EH/s from last week; The average computing power is 152.0TH/S, an increase of about 2.4TH/S.
According to Google Trends statistics this week, the search popularity of the term Bitcoin is 8, which has dropped somewhat; the search popularity of the term Ethereum is 7. The popularity of public searches for digital tokens has not increased significantly with price increases.
4Industry news: Bitfinex plans to raise $1 billion
4.1 24 financial institutions, including the IMF and the World Bank, discuss global encryption management standards
Twenty-four financial institutions and 11 international organizations, including the International Monetary Fund (IMF) and the World Bank (World Bank), recently gathered in New York to discuss global standards for crypto regulation. "It is very important to consistently implement international standards," said the chairman of South Korea's top financial regulator, who was in attendance. Progress report on the G20 meeting held. One of the topics discussed was global encryption management standards. The plenary discussed the different initiatives that standards-setting bodies are taking to address the risks of cryptoassets, as well as any gaps that may exist in this work.
4.2 Bitfinex plans to issue platform tokens and launch IEO to raise $1 billion
Dovey Wan, founding partner of Primitive, a cryptocurrency investment agency, disclosed on Twitter that the cryptocurrency exchange Bitfinex, which is in a lawsuit with the New York State prosecutors in the United States, plans to issue tokens and launch IEO, planning to raise $1 billion. Dovey Wan said the news has been confirmed by two independent sources. A screenshot of Bitfinex investor Zhao Dong’s circle of friends shows that Zhao Dong said that Bitfinex has a high probability of launching an IEO, and it is said that some users have already reserved a quota of 300 million US dollars.
4.3 Bakkt acquires a digital asset custody company and is applying for a custody institution license
Bakkt Chief Operating Officer Adam White announced in a blog post on Monday that the exchange has acquired Digital Asset Custody Company (DACC) to provide protection for assets it holds in cold storage. White hinted that the acquisition could help Bakkt add crypto assets other than BTC after launch. The article also reveals that Bakkt has been working with BNY Mellon to establish a "geographically distributed" private key store. The COO also confirmed that Bakkt is seeking a qualified custodian license through the New York Department of Financial Services. If approved, the exchange would be able to offer regulated custody of any crypto assets it holds, which could help it launch physical BTC contracts in the future.
4.4 Facebook is negotiating with companies such as Visa and MasterCard to launch a payment platform project based on its stable pass
