Facebook Coin Could Drive a Mass-Adoption of Crypto, Study Concludes

Stablecoins are getting more popular. So popular that they could bring about the mass adoption of Bitcoin as giant non-financial companies, such as Facebook and Samsung, get ready to participate in the crypto market.

Facebook and Samsung Are Joining the Stablecoin Craze

A new Binance Research report on the evolution of stablecoins, released on May 15, 2019, underscores the mounting interest of large companies in stablecoins.

Allegedly, these companies are already creating stablecoins and other tradable blockchain-based crypto assets instruments. Thus, they are integrating blockchain technology into their digital wallets and payment systems.

Stablecoins minted by large companies such as Facebook could significantly disrupt the payment and crypto industry worldwide, the study concludes.

Imagine the implications if Facebook starts using its allegedly planned digital coin for payment purposes across Messenger, WhatsApp, and Instagram. According to the report,

These non-financial companies (e.g., Facebook or Samsung) are likely to be less risk-averse than traditional financial companies, and have greater incentive to disrupt the payments industry, with the added ability to execute at a faster, scalable pace.

As a result, these companies may help to define future key growth drivers for both the global payment and the digital asset industry.

The report also points out the critical shortcomings of stablecoins. Unlike Bitcoin technology, for example, a central authority will develop and control the Facebook coin, and its ledger will not be immutable. Users will undoubtedly be required to link their Facebook identity to their FBCoin wallets.

In this regard, depending on whether the blockchain is private or public, and whether there is a central authority, the report came up with four scenarios, specified as follows:

  • Private with a central authority: the blockchain would not be immutable by design (e.g., Facebook controlling the majority of the nodes) and would solely be used as an accounting system to avoid double payment issues.
  • Private with no central authority: the blockchain would be immutable but an insurance mechanism or a litigation system would exist to prevent fraud.
  • Public with a central authority: the blockchain would not be immutable but all transactions would be public.
  • Public with no central authority: the blockchain would be immutable with all transactions being public.

But regardless of the type of blockchain on which the Facebook coin will run, the report emphasizes,

This project could constitute a stepping stone in mass-adoption for cryptocurrency and other digital assets while contributing to the unbanking of the payment industry.

Stablecoins Becoming Integral to Bitcoin, Crypto Markets

As the universe of stablecoins continues to swell exponentially, they are also becoming easier to trade.

Stablecoins aim to lessen price volatility by being pegged to a fiat currency or an exchange-traded commodity as a precious or industrial metal.

US dollar-pegged digital currencies are growing fast. Quote asset volumes driven by stablecoins in Bi ...

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Tags: Facebook, Blockchain, Adoption, Stablecoin, Bitcoin, Coin, Samsung, Mass, Twitter, study