A new era for Bitcoin! Bloomberg and other 20 top media outlets comment on Facebook's cryptocurrency Libra

This article is intended to convey more market information and does not constitute any investment advice.

In one day, Facebook made headlines in business media around the world.

The newly released cryptocurrency project Libra has brought a lot of attention to Facebook, but it has also caused it to fall into more saliva. The debate surrounding Facebook's cryptocurrency has not dissipated because of the product launch, but more and more problems. Why did Facebook launch the cryptocurrency project Libra? Will traditional finance be impacted? What impact will Bitcoin and other cryptocurrencies have? There are many different opinions, and no consensus.

Mars Finance has selected comments and analyses on Facebook's cryptocurrency project Libra from 20 world-renowned media outlets, including The Wall Street Journal, Bloomberg, The New York Times, and The Economist, to help you see the reasons, impacts, and opportunities behind the event.

Wall Street Journal: Bitcoin supporters believe Facebook cryptocurrency will bring more opportunities

Bitcoin supporters firmly believe that Facebook's upcoming cryptocurrency Libra will not kill off other cryptocurrencies. On the contrary, many people believe that the launch of Libra will bring more opportunities to the cryptocurrency industry.

When Facebook unveiled details of Libra on Tuesday, it revealed that it was setting up an association to manage it, with members including more than 20 companies such as VISA and Uber. The corporate element of the Libra Association stands in stark contrast to Bitcoin, which has been managed by a scattered and sometimes volatile group of technicians and entrepreneurs since it was created by an anonymous person 10 years ago.

The difference between the two is exactly why Bitcoin and other cryptocurrency supporters are optimistic about Libra, believing that its launch will greatly benefit the crypto industry. Many people believe that Facebook's move will increase public awareness of cryptocurrencies without losing the characteristics of cryptocurrencies that attract users (i.e. transaction attributes). Some people say that Facebook will have to invest a lot of energy to eliminate the outside world's privacy concerns about it, and privacy has always been the core idea of ​​Bitcoin.

Bloomberg: Facebook's cryptocurrency faces three major challenges

For the latest cryptocurrency project Libra, Facebook will face three major challenges in the future:

First of all, Facebook's performance in payments and commerce has not improved much. A few years ago, Facebook allowed users to shop and take taxis through the communication tool Messenger, but the feature has not been successful. This is not Facebook's first failure in the field of payments. As early as 2010, Facebook began to launch Facebook Credit, a payment service that can be used to purchase virtual goods in Facebook social games. However, Facebook Credit did not succeed until Facebook canceled it in 2012. In 2013, Facebook began to cooperate with third-party services such as PayPal to meet users' payment needs. As of 2018, Facebook's "payment and other services" revenue accounted for less than 2% of total revenue.

If successful, Libra will help Facebook play a bigger role in financial services. But that's just a hypothesis. For 10 years, the cryptocurrency industry has been trying to build cross-border digital currencies on the blockchain to disrupt traditional banking and payment services. However, so far, no crypto asset has been able to catch up with the scale of traditional currencies.

Second, regulation will become another obstacle for Facebook. Creating a digital asset requires not only the acceptance of financial institutions and investors, but also the approval of regulators. The U.S. Securities and Exchange Commission (SEC) has closed more than a dozen companies or projects that violated securities regulations by issuing coins without authorization. Although Facebook said it has been in contact with regulators and central banks, they have not yet received formal approval documents from the SEC - which can protect Libra from institutional supervision.

Finally, the timing of Libra's release will also be challenged. The US Federal Trade Commission (FTC) is investigating Facebook's user privacy. On the other hand, Senator Elizabeth Warren, Facebook co-founder Chris Hughes and many others have been calling for Facebook to be split up. Now that Libra requires users to give Facebook more trust and allows it to enter the digital payment and banking financial industries in a strong way, it may attract more criticism.

New York Times: Facebook plans global financial system based on cryptocurrency

Those who doubt cryptocurrency now also doubt the feasibility of Facebook's cryptocurrency project Libra. In addition, Libra also has to solve Facebook's user privacy issues, which have been criticized, and protecting user privacy has always been the top priority of banks or any financial transaction institutions.

On the other hand, if Facebook really plans to launch this project with more than 100 partners next year, Libra will be the most far-reaching attempt by a mainstream company to enter the cryptocurrency field. Facebook has high hopes for Libra, aiming to build it into a new financial infrastructure system that is not controlled by powerful intermediaries such as Wall Street or central banks.

Facebook CEO Mark Zuckerberg has spoken of his obsession with encryption several times in recent years, and a few months ago he pledged to provide better privacy protections for products such as Instagram and WhatsApp.

But after improving privacy, Facebook will no longer be able to deliver targeted ads to users. Therefore, the virtual financial network will be a new source of income for Facebook after its advertising revenue declines.

The payment system will also help Facebook and other U.S. companies compete for financial services in developing markets, where China's Tencent's WeChat app has reaped high revenue returns by integrating a payment system into its messaging service.

The Economist: Facebook will create a global digital currency

Libra will make sending money around the world as easy as sending a text message. It will eliminate high fees, delays and other barriers to cash flow; it will allow people in less developed countries to participate in the global financial system, protect hard-earned wages from being exploited, and avoid uncontrollable inflation; and it may also trigger a wave of financial innovation, just like the Internet.

Libra has huge potential. If Facebook's more than 2 billion users exchange part of their savings for Libra, it will immediately become one of the most circulated currencies in the world. If it is widely used, it will also give issuers unprecedented power. Libra's impact on the global financial system is profound, and so is its impact on Facebook's business.

If it eventually goes into effect, Libra could become a money-maker for Facebook. Although transaction fees won’t generate much revenue on the surface, Facebook could make more money by making it easier and faster to buy ads. Libra would also allow Facebook’s social messaging product to catch up with WeChat, a Chinese super app that also offers payments and other financial services.

Financial Times: Will Facebook Libra shake up traditional finance?

Facebook’s first foray into the world of finance raises an immediate question — how much impact will the new cryptocurrency have on traditional financial services?

Facebook has promised to disintermediate banks and other payment service providers through Libra, which means that international transfers will be instant and nearly free. If Facebook's more than 2 billion users widely adopt its cryptocurrency, the traditional financial system may be greatly affected, even affecting central banks.

Libra will face a lot of extra burdens because it is introducing a new currency. This may make it more difficult for a country to control problems such as inflation, especially in countries with capital controls.

How do regulators handle cryptocurrencies? Several large bank executives cited an uncertain regulatory environment as one of the main reasons they are not involved in Libra. The head of payments at a large global bank said the situation is "messy". No banks are among Libra's first partners.

Application is the second major problem that Libra will face. Merchants have been slow to adopt simple technologies such as chips in the past, and it is undoubtedly difficult to convince them to accept cryptocurrency payments. The price of cryptocurrency often fluctuates up and down, and merchants need to pay taxes and rents in local legal currencies.

Time Magazine: Lack of public trust may be the biggest obstacle to Facebook Libra's success

Libra was born in a "turbulent era" for Facebook. Since last year, Facebook has made little progress in restoring its reputation after being embroiled in a user privacy scandal. The Federal Trade Commission is expected to fine Facebook up to $5 billion for leaking user privacy data. Several Democratic candidates have called for the breakup of monopolies like Facebook. More seriously, the scandal has undermined public trust in Facebook.

Industry analysts believe that lack of public trust may be the biggest obstacle to the success of Facebook Libra. Facebook promises that the financial history of Libra users will be kept absolutely confidential and will be kept separate from Facebook's data. However, some people are still worried about the data being centralized in one place. But others say that it is a wise move for Facebook to hand over Libra to the association for management, and believe that Facebook is solving the problem of "centralization".

Fortune: Two major problems facing Facebook Libra

At a time when Facebook is facing unprecedented scrutiny from regulators, Libra will help Facebook regain user trust after a series of privacy scandals - its blockchain network is completely open source and written in Move, a new programming language developed by Facebook. Libra can not only be used to record transactions, but also serve as an "innovation layer" for third parties to create smart contracts or other blockchain-based services.

Facebook prefers people to view Libra as a financial service. According to Dante Disparte, policy director of the Libra Association, users in the United States need to complete KYC certification before using its services, which means that users need to provide detailed personal information.

So why did Facebook launch Libra? According to conversations with Facebook executives, they tend to enter the remittance market by providing users with simple and low-cost cross-border transfer services.

Libra will also bring new advertising and e-commerce opportunities to Facebook. In the future, Facebook can display advertisements on WhatsApp and Instagram, and users can directly use Libra to purchase the goods or services in the advertisements.

A big problem facing Facebook is that if the government sees Libra as a disruptor of its own fiscal policy, then the future of Libra will be full of "regulatory landmines." But Facebook said this is not a problem, and governments have realized that the trend of cryptocurrency is unstoppable, and many people welcome it.

Another question is how Facebook's partners will benefit. Service-selling companies such as Uber may see the opportunity to reduce payment costs brought by Libra, while financial companies will look forward to snatching market share from traditional financial institutions through Libra and finding new business opportunities. Andreessen Horowitz, a well-known venture capital firm that has cooperated with Facebook, said that becoming a node of Libra is not entirely for short-term gains, but for the hope of being able to participate in the forefront of financial innovation.

Users will ultimately determine whether Libra succeeds or fails. If it becomes widely used and proves itself to be better than credit and debit cards, it has the potential to transform large swaths of technology and financial markets, potentially even inspiring Apple and Amazon to launch their own cryptocurrency networks.

Forbes: Facebook Libra will reshape consumer behavior

On the surface, Facebook Libra is just a global currency for payments, but it may act as a Trojan horse and become a strategic tool to reshape user behavior.

Game developers spend a lot of time designing game trading systems to reward players for specific behaviors - all of which are achieved through virtual game tokens. Through game tokens, game developers can increase user participation in the game, allowing users to actively complete tasks issued by the system, fight monsters and level up, and even build virtual communities. In essence, game developers are using newly created economic tools to shape user behavior.

Now, Libra can allow real-world organizations to shape user behavior in the same way as in games, and encourage users to actively participate in their activities through cryptocurrency incentives. But unlike game tokens, Libra has higher value and liquidity and can be used in real life. Game tokens can only be used in the game they are in, and cannot be used to purchase items in real life.

Libra has three attributes that allow it to achieve this:

CNN: Facebook wants to make cryptocurrency mainstream

Facebook's cryptocurrency will face obstacles to widespread adoption.

Users may have to make a bank transfer or go to a specific exchange office in their area to get Libra. In addition, it is unlikely that a user transfers money to a friend through the Facebook messaging app, and the other party does not deposit the money into the bank but exchanges it for Libra. In general, although Facebook's huge user base can bring a lot of exposure, the success of Libra depends on what users can do with it, not just using it on Facebook.

BBC: Facebook Libra will become the "currency of the future"

Facebook Libra is an ambitious plan to create a new global currency. Some might say it's hubris. But Facebook's David Marcus believes that Libra is intended to "correct the system of many current systems" and provide billions of people with the freedom to manage their money.

The message revealed here is that Libra is not a small project. It is related to the future of Facebook and the future of money. Behind this initiative, we see that the leading players in the payment field represented by PayPal and VISA have united with Silicon Valley companies and venture capital institutions such as Uber and Lyft to form an alliance. Just like another form of the Avengers, superheroes in technology and finance have gathered together to make the world a better place.

Wired: If Libra wants to succeed, it must not only cooperate with large companies, but also with ordinary developers

Facebook named Libra for three reasons: 1) it was a unit of measurement in ancient Rome; 2) it is an astrological symbol that depicts the scale of justice; and 3) it is pronounced similarly to the French word for “libre,” meaning freedom. Facebook explained that Libra is “a combination of money, justice, and freedom.”

To achieve these lofty values, Libra will need to work not only with big companies like Uber, but also with ordinary developers - as long as they can get a network signal. Libra's mortal enemies will appear, and the promises of privacy and security must be fulfilled. The Libra Association must prove that it can operate independently of Facebook. Otherwise, all efforts around it will be seen as another selfish act of Mark Zuckerberg.

CNBC: Libra is a "positive" for Facebook

For Facebook, Libra is a "positive thing". Through Libra, people in trouble can more easily get money in the digital age. Facebook, which has been in trouble for user privacy, is trying to save face with Libra.

New York Magazine: Facebook Libra's Ultimate Goal - Fiat Currency

The $689 billion global remittance market is not Facebook's ultimate goal for launching Libra, and it hardly collects much money directly from cross-border payments. Unlike rivals such as M-Pesa and PayPal Xoom that target the remittance market, Facebook Libra will not charge too much in remittances. But as Facebook has always been known for its approach - Libra is an important means to attract new users to its services, and then Facebook will use the accumulated user advantage to convince stores, restaurants and other merchants to accept Libra payments.

In addition to competing with transfer services, Libra will also compete with credit cards - this may be its mid-term goal. Suppose a scenario where you receive a cross-border transfer of Libra from a foreign friend, and then transfer it to another friend through the Facebook communication app, and the friend then uses it to spend in an offline store. This is exactly one of the usage scenarios of China's WeChat. As China's largest social network, WeChat integrates communication, social, and payment functions, and is a mixture of Facebook, WhatsApp, Apple Pay, etc.

But Facebook's long-term goal is not here. If it is just to become the American version of WeChat, why would Facebook create a new form of exchange? It can cooperate with an international bank and enter the payment market with its huge social network and lower service fees than its competitors. Therefore, the long-term competitive target of Facebook and Libra is not VISA, PayPal, WeChat, but the Japanese yen, euro, US dollar and RMB.

The Washington Post: Libra will be revolutionary if it succeeds

Facebook's idea for Libra is simple, but if it works, it will be revolutionary - transferring money through Libra will be as easy as sending a message. Facebook also plans to expand Libra to more services, such as paying bills with a tap, buying coffee with a scan, and even using Libra to take the bus.

The price of Bitcoin is determined by market demand, so it has huge fluctuations. But Libra is supported by a financial reserve that mixes the world's major stable currencies. "Libra's stability will provide monetary utility to users, rather than allowing investors to gamble."

Yahoo Finance: Facebook Libra is different from JPMorgan Chase's JPM Coin and is a real cryptocurrency

When JPMorgan Chase announced its own cryptocurrency, JPM Coin, in February, it was seen as a major commercial bank actively embracing cryptocurrency. But as details emerged, JPM Coin looked more and more like an internal token that could only be used by JPMorgan Chase customers, rather than a real, distributed cryptocurrency.

Facebook's entry into the crypto industry looks different from JPMorgan Chase's, and its goal is to make Libra usable outside of Facebook's system. In other words, Facebook Libra may be the project that truly brings mainstream legitimacy and use to the crypto industry.

The Guardian: Libra will replace the US dollar as the world's universal currency

If successful, Libra will replace the US dollar as the world's universal currency. Even if it succeeds in taking over 5% of the US dollar's global currency role, Libra can affect the position and power of the US economy in the world.

Only a company as global, well-funded and politically influential as Facebook could realistically hope to take over the global remittance market, and it could do so by reducing the associated fees to almost zero. Once Libra achieves this goal, it will make it easier for migrants and their families to send money while eliminating all competing services, including local banks and informal financial networks.

NBC News: Regulation is Libra’s most notable short-term challenge

Facebook Libra will face many challenges in the short term, most notably regulation. In the long term, its challenges come from basic technology and governance.

Government regulation of cryptocurrencies is an evolving issue, and Libra has already faced political resistance in Europe. Bank of England Governor Mark Carney said at the European Central Bank's annual meeting on Tuesday that Libra has the opportunity to become a "systemic service," but "must comply with the highest regulatory standards."

In addition, Libra will face various system technology issues, including security, privacy, governance, transparency, and whether it can truly be applied to millions or even billions of people.

Facebook and its partners have consulted a lot of technical and legal advice, but they still have to work within the existing laws. "Will Facebook be allowed a pass?" said Renee Leibler, co-founder and president of the Blockchain Digital Asset Forum, a subsidiary of the New York University Education Group. "In a country where the rule of law applies to everyone, a pass is not always effective."

Los Angeles Times: Why is Facebook launching a cryptocurrency?

Over the past three years, as one scandal after another has taken away people's trust, Facebook founder and CEO Mark Zuckerberg has publicly expressed his remorse and promised that Facebook will assume more social responsibility and put user privacy at the center of its products.

On June 18, Facebook launched the cryptocurrency Libra, which it intends to use to challenge the global banking industry. For Facebook, Libra represents a new opportunity. Facebook can use its dominant position in the fragmented lives of more than 2 billion users to try to dominate the financial lives of users and even facilitate transactions between users in other products, such as Instagram, Facebook Messenger and WhatsApp.

In developed countries, Facebook earns a lot of revenue from online advertising. Libra provides users here with another opportunity to spend time in the Facebook system. If Libra transactions are more seamless, it could make Facebook's targeted advertising more commercially valuable, technical analysts said.

In developing countries, advertising profits are low, and Facebook is also looking for new user growth points. Libra can attract new user groups for it. If these people are looking for stable, low-cost, smartphone-based international banking, then Libra is exactly the service they want.

Business Insider: Different regulatory rules in different countries will put Facebook in a dilemma

Facebook and its partners have high hopes for the newly announced Libra cryptocurrency, hoping it can become a global currency that supports cross-border payments and can be used by people without bank accounts.

But Facebook has not addressed many of the problems that could cause Libra to fail, some of which could kill it before it even reaches its 2020 launch date. Most of them are related to financial regulation.

Part of Facebook's challenge stems from its global ambitions for Libra - Facebook provides services in almost every country in the world, so it hopes that Libra will appear in these countries. But each country has its own set of rules when it comes to regulating banks and other financial services. In some cases, the regulations applicable in one country even conflict with those in other countries.

For example, the United States will require Facebook and its partners to provide enough US dollars as a deposit for Libra, but in Nigeria, the deposit must be in Naira (local currency). This situation will put Facebook in a painful dilemma.

Barron's: Facebook Libra marks a new era for Bitcoin

The launch of Libra is a boon for cryptocurrencies for several reasons:

First, Libra is an ambitious project, and Facebook has invested a large number of executives in it, rather than just mobilizing social media networks through internal incentive systems. Of course, this does not mean that Libra will succeed, but the impact is far-reaching enough. People in the crypto world are ambitious and want to transform the financial system with blockchain. Now that a large Internet company supports them with actions, those ambitions are no longer so slim.

Second, Facebook understands marketing better than anyone. When its marketing strengths and resources are invested in the cryptocurrency field, the public’s perception of the crypto industry will be greatly improved.

Third, Facebook will inject new energy into the crypto industry, bringing in talent, attention, and financial resources. Money does not equal success, but it can increase the chances of success.