What Google's Banking Efforts Mean for Facebook Libra
While Facebook has already attempted to enter the cryptocurrency industry through its Libra currency and system, Google now has its own banking effort as well. Google’s project, currently code-named “Cache” (which I personally think is a great code-name) is an extension of their Google Pay system which is projected to reach 100-million global users in 2020. Google plans to offer checking accounts to its consumers and has partnered with Citigroup and Stanford Federal Credit Union to do so. However, this news is still fresh and there is not a lot of information regarding Google’s plans yet. At first glance, this may have an initial impact on the cryptocurrency industry as it encourages users to stick with traditional fiat currency; however, with the information currently available, it does not seem to replace or compete with any cryptocurrencies in the way that Facebook’s Libra has. Right now, I do not believe there to be any significant impact on the cryptocurrency industry; although, I do believe that Google will plan on increasing the speed of transactions around the globe through their Google Pay system which can take away from cryptocurrencies where this is already a positive factor in their application.
I do not believe that giving the cold shoulder to Libra is a part of Facebook’s grand plan; I believe that it is simply in a position where there are higher priorities. With that said, in early May Libra hired a new CEO - Stuart Levey, a former U.S. Treasury undersecretary who has spent the last eight years as HSBC’s chief legal officer. I also believe that Facebook wants to continue its initiative in serving the unbanked population around the world and to streamline the payment system online. Due to Libra’s current predicament, in which Facebook/Calibra will have to overcome many hurdles for it to see the light of day, Facebook’s plan to roll out FB Pay can allow them to get into space through another application.
I do not believe that Libra was a stooge to soften the impact and make an entry for a less controversial foray into finance; although this could be a good move by Facebook seeing as how Libra is unable to move forward in its current plan – it will have to change and Facebook/Calibra will have to answer the many questions lingering from the two separate Congress hearings.
Libra currently stands in a bad position in which the Libra Association is losing precious members and Facebook/Calibra have been unable to properly answer Congress’s questions into the system's overall use and Facebook’s involvement in the whole plan. As it stands, I do not believe that Libra will be able to move forward. Facebook and Calibra will have to come up with clear and actionable answers to Congress’s questions and will have to convince Congress that Facebook will not access or use Libra’s data and information in any way, which has been the main pushback from Congress thus far. Now that Facebook is moving forward with FB Pay, it remains unseen whether or not Facebook and Calibra will rework Libra into a position that can be more easily accepted by Congress; especially considering that Facebook remains involved in its system which seems to be an unacceptable aspect by Congress.