Facebook annouces ​own cryptocurrency. What is the impact fo​r small business? ​

On Tuesday, June 18th, Facebook has announced it will be launching a cryptocurrency as soon as next year, the Libra. The company has promised to bring stable virtual money to smartphones. Libra is backed by several financial and nonprofit partners, and the social media giant wants to enlist 100 businesses before launching it. It is an ambitious plan by the most prominent social network to bring crypto-money into the mainstream.

Facebook and its partners released a prototype of the currency as open-source code for developers interested in implement it into apps. Besides the fact that the company’s action disrupts its mission of connecting the planet, what does this move mean to a small business owner? And how is this going to impact your business?

The currency

Facebook will start its wallet, named Calibra, so that people can spend Libra. The company plans to make it available through its apps, WhatsApp, Facebook Messanger, and as a stand-alone app. Users will be able to send and receive money at low or no cost.
The giant tech is not directly controlling the currency. The company is just a part of a new governing body called the Libra Association. The list of founding members is impressive: Visa, Paypal, Uber, Stripe, MasterCard, eBay among others.

Digital currencies

Digital currency is an alternative to the dollar or the local money. But, the current system is overly complicated, making it unviable to use it in daily transactions. That is one of the main reasons why cryptocurrencies have not gained much traction. Most people associate digital money with gamers, and questionable transactions initiated in the darb web.

However, with so many reputable companies backing the Libra, it could be something that people would be inclined to use. Unlike other digital currencies, the Libra Association offers a centralized network with a governing body.

Experts have been skeptical of cryptocurrency due to the lack of assets and the extreme fluctuation of it. The partners are offering a solution to this problem by providing a controller, and backing the coin with low-volatility assets to maintain it stable.

An invasive form of surveillance

In recent years, the giant tech has faced a series of scandals concerning the handling and misuse of its user’s data. With the new service, the company will add financial information to its vast pool of data. Experts are concerned with the amount of information the social media company will have and consider it a power grab.
The company is currently facing a possible antitrust breakup; if the coin is successful, this could become the most severe case of antitrust.

Impact of the new currency for a small business

The cryptocurrency could be a filling a need, especially in developing economies where the money is not reliable. The idea is excellent, but the execution might be a little more complicated than it seems. About half of the adults in the world do not use or have a bank account, and the numbers are steeper in developing countries.
If you have a bank account and decides to be a user, this could be a simple way to send payments. Facebook’s primary goal is to provide a seamless way to conduct transactions within its apps. Further, if Libra becomes a successful endeavor, small business owners could enjoy lower transaction costs. On the other hand, all of the business information will be stored in one location, making data breach much more devastating.

Conclusion

It appears this is a move the giant tech is taking to shift its primary purpose from the ad-focused platform and build an e-commerce site. Experts predict that Facebook will have to overcome skepticism from many users. It will take time for people to regain confidence after the embarrassments over data misuse and protection.

However, if Facebook, in fact, develops an e-commerce platform, with a built-in currency that reaches all over the world. It is an opportunity too hard to be passed up by anyone, but especially for a small business.