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Why Facebook's Libra Is Poised for Success

June 26, 2019 00:00 AM UTC
- Updated May 12, 2020 19:59 PM UTC

Facebook Has 2.4 billion mostly active users.

Transcript
Welcome to Fortune Tech Debate where we discuss the issues of the day in two minutes. Today, we're talking about Facebook's Libra. The media giant has officially released its plans for a new cryptocurrency. Lisa Marie, what is the likelihood that this project succeeds? Unfortunately, I think it's actually very, very unlikely for a couple reasons. To put it simply, they just don't have a strong enough use case. And I don't think they have the support. I think they're saying, we have some backers. But I think that they are overplaying the support that those backers are actually giving. And that's really critical for the success of Libra. Well, I strongly disagree. I think there is a use case. There is no sort of native monetary system for the internet. I think the financial systems all around the globe, they're sort of secluded, isolated from one another. And when you want to send money overseas or anything like that, there are tons of middlemen involved, and they take huge fees out. Meanwhile, Facebook has such a global reach. They've got products that are used all over, Whatsapp being the main one. This is a company that has 2.4 billion monthly active users. That is a huge audience, a huge population, a huge footprint that is going to be immediately receptive to this new product. Yeah, I'll grant you they have a massive reach. But I don't think we can assume that they will automatically get on board with this. And the market is there. You have people like PayPal that have been creating a better way to do commerce overseas for quite a while. They have fees, but it's much more manageable than, I think, we're acting like it is. And I just don't think that there's support. We can't assume that just because they have these users on the platform that they'll say, yes, they want to use Libra. Well, Facebook has managed to get so many big corporations involved. You mentioned PayPal. PayPal is one of the backers of Libra. And meanwhile, Facebook has also gotten a bunch of the rival companies, the rival payment networks like Visa and MasterCard to team up together to get behind this new currency, Uber too and so many other big names. It is a huge, tremendous initiative. Yeah, they're big names, but they are kind of just half in and half out. They're saying they are pledging their support, but they're not actually committed to it. At the first sign of trouble, I think we're just going to see them back out. I think this thing is going to take off. There's no question. Anyway, time is up. Come to fortune.com for more Tech Debate.