Since Facebook released the white paper of its digital currency Libra on June 18, it has had a huge impact on both the Internet industry and the blockchain industry. It is a conspiracy designed to maintain the hegemony of the US dollar. Some people believe that Facebook's financial innovation is no less than Apple's launch of IOS.

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The impact of Facebook's currency issuance?

Finance: seize the banking market and challenge the national currency system

Once Facebook’s coin issuance is successful, the financial sector must be the first to be impacted. It will bring two consequences. First, Facebook will compete directly with banks, seize the banking market, and even subvert the existing Swift International settlement network system; second, facebook will become a borderless central bank, which will have an impact on the existing currency systems of many countries.

Let me talk about the first one first. In fact, Facebook has a good target for issuing coins, which is WeChat payment. WeChat and Facebook have many similarities, for example, they are both social, they also have a large user base, and they also face growth bottlenecks. WeChat faced the dilemma of growth many years earlier than Facebook. During this period, WeChat made the choice to expand its boundaries. Therefore, Tencent not only made WeChat a social product, but also turned it into a comprehensive platform integrating payment, e-commerce, and diversified life.

Therefore, when facebook faces the same dilemma, it has an object that can be used for reference. It's just that Facebook has a larger user base and spans more countries, so it chose the path of issuing digital currency to solve cross-border transfers.

So what is the direct impact of WeChat payment? It just changed our payment method. We can pay for shopping, taxis, and ordering meals through WeChat. The same is true for facebook. Since it is going to be an international version of "WeChat", the first thing it will change must be the payment habits of most users.

Judging from the composition of the members of the Libra white paper, there are eBay, Uber, Booking Holdings, paypal, etc., including leading players in various scenarios such as e-commerce, taxis, payment, and retail. Pave the way for the usage scenarios of the digital currency Libra. At present, the payment channels for these scenarios are mainly banks. Once Libra lands, the first thing is to directly compete with banks and seize the banking market.

Moreover, Facebook is very different from WeChat in that although WeChat has seized the bank's payment market, WeChat payment is still the RMB version of electronic cash, which must be settled with the bank after all, but Facebook has issued its own digital currency. To ensure the stability of the exchange rate of the digital currency issued by itself, once the bank seizes the payment market, the bank will lose the right to settle the market in a real sense.

In addition, Facebook's Libra will also have a subversive effect on the existing Swift international settlement network system. Currently, for cross-border transfers, from a bank in one country to a bank in another country, the Swift network must be used for supervision and cash settlement. Libra, on the other hand, can bypass this system, because digital currency belongs to the transmission of information and does not involve cash settlement, and transferers can directly conduct peer-to-peer payments through Libra.

Therefore, for those countries that have problems with the credibility of legal currency, Facebook, which has two trump cards of payment value and cross-border transfer, can be replaced, and it will pose a challenge to the national currency system in the long run.

On the Internet: It is possible to open a Pandora's box of giants fighting for hegemony

From the perspective of the Internet, facebook issued currency, and other Internet giants are in a strategy of "gardening food widely and becoming king slowly". Everyone is silently stockpiling technology and waiting to see the follow-up development of this matter. As Ma Huateng said, "The technology is very mature and not difficult, it just depends on whether the regulation allows it." Because the issue of digital currency, whether it is for China or the United States, is a challenge to national currency sovereignty.

But from another perspective, the greater the risk, the greater the reward. Once facebook successfully issues currency, it has inherent advantages and can seize the digital payment market in advance. Combined with its traffic advantages, it is enough to form a stronger monopoly. At that time, you can refer to the situation of domestic WeChat, JD.com, Meituan, and Didi. Facebook will have one more dimension than other Internet technology giants, firmly grasping the payment entrance, and entering the core business of other Internet giants, such as e-commerce, For travel, food delivery, etc., you can stick to your own social advertising business. Once users get used to this digital currency payment method, it will be difficult to leave Facebook's product system.

By this time, other Internet giants have only two choices, either choose to cooperate with Facebook, or issue their own digital currency. Under the temptation of such a "big cake", companies such as Microsoft, Google, Amazon, Ali, and Tencent are at the same level as Facebook, with all the technology, talents, and traffic. In particular, Ali and Tencent have mature domestic With mobile payment experience, how could they watch facebook eat up the entire market by itself? Naturally they will choose to issue their own digital currency.

In the end, it is very likely that the giants will compete to issue their own digital currencies and compete with each other in this market. In the end, the market will follow the 28th rule, and one or two giants will win, forming a stronger monopoly.

Blockchain: the coexistence and opposition of Bitcoin and Libra

For the blockchain and digital currency, the issue of Facebook’s currency is definitely a very good news. First, because Facebook, as a technology giant with 2.7 billion users, announced the issuance of currency with its credibility , is enough to change outsiders’ views on blockchain and digital currency, and reduces the education cost of blockchain for most people; second, this matter will attract more people’s attention, whether it is capital or traffic, it will promote The rapid development of blockchain infrastructure; third, the entry of the regular army will attract more supervision, which will help the industry move from disorder to order.

However, don't be blindly fanatical. In the short term, Facebook's entry is likely to cause a major cleansing of the current blockchain industry. The first to be impacted are these stablecoins like USDT and crossovers such as Ripple and Stellar. Projects for border payments. The first thing they consider is how to compete with them and keep their current market share when a stronger traditional Internet giant enters the market.

In addition, from another perspective, Facebook's entry may not necessarily bring about the "bitcoin era" we expected. Some people think that Facebook has 2.7 billion users, even if it brings in 1%, there will be 27 million people, which is enough to push the price of Bitcoin to a new round of big "bull market". This sentence makes sense, but the problem is that it still takes a long enough time to transform users who did not manage money or invest in digital currency into investment users.

On the other hand, Libra issued by Facebook and Bitcoin also have an opposite side. We must know that Libra is not a decentralized digital currency in the traditional sense like Bitcoin. It has a very clear centralization label and is technically adopted in the form of an alliance chain. In a sense, it is similar to Bitcoin. Decentralized digital currencies are the opposite.

The initial application scenario of Bitcoin is payment, but with the choice of the market, Bitcoin has gradually changed from a payment tool to an investment commodity. The main reason for this is its decentralized nature, which makes it difficult for the government to supervise, so Bitcoin is a niche and not accepted by the mainstream.

When Facebook is like this, the user volume is larger, the financial strength is stronger, and the "regular army" that is more likely to be recognized by the mainstream comes in, which will bring a large number of users into the industry. People who were originally outside the circle have become part of the blockchain industry. .

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What will be the policy response?

Of course, the premise of the above impact is that Libra can be implemented smoothly. As far as the current situation is concerned, the policies of various countries may be a very big resistance, and domestic technology giants are also waiting to see the attitude of politicians. Therefore, in the end, Mr. K will analyze the attitudes of the United States and Europe towards Facebook’s currency issuance.

United States: Divided internal opinions

Facebook's currency issuance will challenge the monetary sovereignty of many small countries, and the first batch of companies participating in Libra are basically American companies. Among the legal currencies linked to Libra, the weight of the US dollar should be very high. Thus, there is the US dollar conspiracy theory, the United States promotes the digital economy era of the US dollar in order to maintain the hegemony of the US dollar.

However, judging from the current U.S. policy, opinions within the U.S. government are also very divided. Previously, the chairman of the U.S. House of Representatives Banking Committee and U.S. Congresswoman Maxine Waters said that Facebook should stop the development of the Libra network until the end of the review hearing on Facebook's new cryptocurrency Libra.

Sherrod Brown, the ranking member of the Senate Banking Committee, also argued that Facebook has exploited user data in the past and therefore would not allow "a risky new cryptocurrency to be run in Swiss bank accounts without supervision."

On June 19, the day before yesterday, Federal Reserve Chairman Jay Powell said at a press conference: "Digital currency is in its infancy and there is still a long way to go. Basically, I am not too worried that the US central bank will Monetary policy can no longer be enforced because of digital currency or cryptocurrencies. At the same time, the Fed will not put Facebook’s Libra project on the agenda because the Fed does not have such powers.”

It can be seen that the United States currently does not have a unified opinion on the issue of Facebook's currency, and Facebook can promote Libra as quickly as possible during this period.

Europe: against

However, unlike the divided opinions in the United States, the opposition attitudes of European countries are very clear.

On June 18, French Finance Minister Bruno Le Maire issued a warning that Facebook's cryptocurrency does not have the ability to become a sovereign currency. He stated that it is impossible for Libra to become a sovereign currency, it cannot and will not happen. And urge the central banks of the G7 member countries to understand the scope of use of the cryptocurrency Libr. Maire worries that Facebook will have the ability to collect vast amounts of user data.

And Markus Ferber, a member of the European Parliament in Germany, called for a regulatory review of Facebook's blockchain project. Ferber warned that Facebook, with more than 2 billion users, could become a "shadow bank" and regulators should be on high alert. A multinational corporation like Facebook must not be allowed to operate in a regulatory haven when launching a virtual currency.

Giovanni Buttarelli, head of European data protection, also worries that Facebook's integration of data and financial power may further increase the risk of leaking user privacy.

Judging from the attitudes of European countries, the development of Libra in Europe may face strong resistance.

Other countries: Doubt

In addition to European and American countries, important countries in other regions are not very friendly to Libra.

RBA Chairman Lowe has previously been skeptical of Facebook's cryptocurrency project Libra. When asked about Libra's impact on Australia, he said, "There are a lot of regulatory issues that need to be resolved, and they have to make sure there is a solid business case, so We must be cautious before drawing conclusions."

Japan, which is more open to digital currencies, is also more cautious when facing Facebook's currency issuance plan. On June 20, Haruhiko Kuroda, Governor of the Bank of Japan, said that there has always been debate about whether encrypted assets can be used as a means of payment and settlement, whether their asset value can be stabilized, their technology is stable, or they meet anti-money laundering restrictions. , Regarding whether encrypted assets can gain people's trust as a means of payment and settlement, and what impact the financial system may have, we will keep in touch with relevant domestic and foreign authorities and closely observe trends.

And the new market that is crucial to Facebook, India, has previously made its attitude towards digital currency clear. Earlier, India announced a draft of a comprehensive ban on digital currency, and those who hold, trade, and mine digital currency may be sentenced to 1 to 10 years in prison. Facebook has yet to submit any application for its cryptocurrency in India to the Reserve Bank of India (RBI), according to people familiar with the matter. And Calibra, Facebook's digital wallet, will not appear in a market where "cryptocurrencies are banned or Facebook is prohibited from operating."

At present, Facebook has 310 million users in India. Once the European and American markets fail to open up, and the new market is completely imprisoned, Libra may face the possibility of "abortion".

In general, facebook’s currency issuance is undoubtedly a meaningful event. Once successful, it will bring a series of chain reactions and even promote the development of a world-class digital economy. However, high returns also mean high risks. Regulatory policies of various countries will be a great hindrance.

As far as the country is concerned, it is mainly a wait-and-see attitude. Last year, major banks in China reported that they would issue stable currency in RMB. At present, China already has the first-mover advantage of mobile payment. Even if the digital economy is really implemented in the future, it will definitely not lagging behind other countries.