Ikenna Uwakwe has been a writer since he could hold a pen. Having a lot of literary works in his portfolio including Poems, Articles and Essays. He enjoys a natural likeness for anything related to technology. His Educational background includes computer science and programming. As a seasoned cryptocurrency enthusiast with a professional writing career path of over two years of blogging for blockchain related companies. Working with various Fintech startups in the past, has aided him to better understand what IT proponents as well as financial Investors look out for.
Social media giant Facebook breaks the shackles of regulatory bondage as FB stock price soars high following the announcement of its crypto project – Globalcoin.
Since Facebook announced the launching of its crypto-related venture, the social media powerhouse has enjoyed recognition like never seen in the past year. Mark Mahaney and Zachary Schwartzman of RBC Capital Markets in an interview by CNBC, stated:
“We believe this may prove to be one of the most important initiatives in the history of the company to unlock new engagement and revenue streams.”
Barely on its heels towards monetizing their social messaging platforms – Instagram, WhatsApp and Facebook Messenger. The company is likely to amass an unprecedented growth in the near future. Foreseeing an ample opportunities to reach out to over 1.7 billion people who exclude themselves from the traditional financial system globally.
Past Regulatory Scuffles
Facebook is not the only Fortune 500 company to undergo regulatory fracas. In fact, leading fintech companies Microsoft (MSFT) and Google’s Alphabet (GOOG, GOOGL) have both been subject to such treatments in the past.
While Microsoft faced an anti-trust lawsuit as a result of its windows monopoly of the ’operating system’ sphere in the late 1990s. Alphabet’s was a case of over a decade old scrutiny by the FTC in 2013. However, both firms seem to be trading well above most of their pairs in the stock market.
According to Macrotrends, as of the 14th of June, Microsoft (MSFT) stock was trading at $132.45 from its $22.59 price in 1998. While Google’s Alphabet GOOG & GOOGL stocks were both trading at about $1,085 in juxtaposition to its $443 price in 2013. Both these companies, have accumulated an excess of over 2x of their stock price from the moment of these regulatory scuffles to date. Facebook is not going to be an exception.
Is Blockchain the Answer?
The year-old Libra crypto project is scheduled to be officially launched tomorrow. Facebook is to partner with the global currency and financial infrastructure blockchain platform – Libra, in order to see to the integration of the cryptocurrency into the social platform.
The Libra ecosystem is one that ships in with a blockchain solution as well as an asset reserve repository. Embedding the Libra network into the Facebook core would provide the social networking platform with a cryptocurrency – Globalcoin. One that is stable, secure, fungible, generally accepted and also has low inflation tendencies.
Latterly, the FTC investigation dazed a huge blow on FB stock price. And although blockchain might not seem to be the way out on a short term basis. In the long run, buying into the stocks of Facebook would guarantee a bullish investment opportunity for traders. Amid the news, Facebook stock price has increased from $131.7 USD to $195.47 between April – May and is currently trading at $181.33 threshold.
Contrary to claims by Facebook, the social media outlet is believed to be going into partnership with a host of other financial, IT and payment processing companies. These technology, digital assets, and retail companies would collectively serve as a governing body for Facebook’s crypto-coin. Yet neither Facebook nor the member companies of the consortium known as the Libra Association would wield autonomous control over the coin.
These companies, expected to remit a sum of $10 million as a closure for the partnership includes: Facebook, Andreessen Horowitz, Creative Destruction Lab, Thrive Capital, Ribbit Capital, Union Square Ventures, Coinbase, Xapo, Anchorage, BisonTrails, Calibra, iliad, Vodafone, Farfetch, eBay, Mercado Libre, Women’s World Banking, Kiva, Mercy Corps, Uber, Lyft, Spotify, Booking Holdings, Mastercard, PayU, Pay Pal, Stripe and Visa.
Globalcoin could become the most used stablecoin as it would be backed by a number of fiat currencies, bringing about mainstream adoption of cryptos in the long run.
Meanwhile, a lot of critics from the crypto community refers to Globalcoin as merely a fiat currency disguised as a cryptocurrency. Crypto enthusiast Charlie Shrem noted this saying:
”I’m just gonna say it.
I think the “FacebookCoin” is an attempt by big tech, banks and credit card companies to lure people away from Bitcoin into “better, easier, crypto”, which is nothing more than a fiat coin being masqueraded as crypto.
Millions will be fooled.”
Others in the space are bullish about Facebook’s involvement with crypto and believe that the social media giant could take the crypto sphere to the next level.
Another crypto proponent, Ray The Block, goes on to propose an anticipated partnership agreement that would enable the coin to attract global endorsement:
Possibly $FXC Flexacoin because Flexa protocol enable crypto payments into fiat to retailers: 1. Back by Gemini (and FB and Gemini are in contact). 2. Most A grade team 3. Already available in 30k US stores 4. No ICO, registered in NYC (toughest crypto laws), US team…
— Ray The Block (@Ray94609549) June 17, 2019