Facebook set to reveal details around its global coin on June 18th. The social media giant briefed investors about the date of releasing the projects whitepaper.
A lot of speculation surrounds the onset of the global coin which will be pegged on a dozen currencies. One of the conjectures is how the global coin could affect other digital currencies. Most especially the future of XRP.
Laura McCracken – A head of financial services at Facebook told German Magazine that, ‘backing the Facebook coin with other currencies would prevent price fluctuations’
A promising future for the Facebook Coin
The overcrowded hype associated with the digital currency predicts a healthy adoption future of the global coin. The Blockchain space is highly competitive with recent emergence of hundreds of Blockchain project; all competing for adoption in the free market. However, here is a coin with a lot of potential and a healthy future for adoption. The launch of Libra will debut high chances of free or low transactions between families and friends. The project could ignite a new era of cross border money transfer, social network business and eCommerce.
However, this comes at a cost for the market share of a few smaller digital coins. The global coin could favor a few a few bigger coins, especially Bitcoin. Nevertheless, the reality remains it could cause a BTC dip but by a meager percentage. Meanwhile, the coin is a big advantage to the cryptocurrency community because it could spark mass adoption of digital currency across the world.
But for XRP, the future seems bleak. Here is why.
First and with regards to high inflation and remittance rates in developing countries; the Facebook Coin seeks to offer a solution to this by providing a free and fast P2P transaction. Slicing this opportunity only existent in developing nations, the global coin will adjust the cost and speed of transactions. Hence, this will cause conflicting interests between the Facebook Coin and XRP.
Why XRP and not any other Coin
Ripple started XRP to solve the challenge of high remittance rates. However, unlike so many other cryptocurrencies, XRP was built with commercial banks in mind. Majorly, XRP was meant to work side by side with banks and help reduce high remittance rates.
This is the same problem that Facecoin is meant to solve but in a different way. Note that, Facebook designed its coin in a way that makes physical banks obsolete. Yet here comes the kicker, experts and e
Enthusisatses have praised the coin months ahead of its launch; possibly predicting early adoption among millions of interested social media users.
In fact, Facebook signed deals with payment companies such as MasterCard and PayPal to support the new cryptocurrency.Each partner has invested up to $10 million towards a $1 billion reserve against which the global coin will be pegged.
Max Keiser expressed similar concern in a tweet adding the Facebook coin had potential to make other alt coins useless. Charlie Shrem, the founder of the Bitcoin foundation claimed the global coin would make XRP redundant.