Investors in Facebook Inc. (NASDAQ:FB) will undoubtedly have heard about plans for a new cryptocurrency named Libra, veiled as a global currency the company hopes will one day be as ubiquitous as the U.S. dollar. This cryptocurrency is expected to launch next year, backed by government securities and currencies, dubbed a "stablecoin" by industry experts. Having hard assets backing this digital asset is interesting, and provides credence to an industry which has been plagued by concerns around price manipulation and dark web ties.
The hope is that Facebook users will snap up these digital coins to engage in transactions across the company's platforms, encouraging consumer decisions to happen faster for advertisers on its platforms, potentially boosting revenue and creating stickiness around its massive base of monthly active users. Allowing users to send and receive money via the various messaging platforms Facebook operates would also allow the company to monetize what has otherwise been a business segment which has relied on advertising dollars in the past, providing additional income streams and lessening the importance of advertisers in terms of the tech giant's overall revenue stream.
This move into cryptocurrency is one I believe will provide shareholders with value, as I really do believe a crypto asset that is backed by hard assets, audited, and widely used by the public will take off in the medium to long term. For investors with a relatively long term investment time horizon, Facebook has found another way to justify investment in a company many (including myself) believed was too expensive for too long.
Invest wisely, my friends.
