Wearing a crypto coin on her necklace, Grace Wong is upbeat about the future of cryptocurrency as Facebook gets set to enter the space with Libra.
“We’re basically making blockchain very easy and making it very usable for normal people to use,” Wong says.
As cryptocurrencies begin to climb again following a prolonged slump, Ms Wong, the co-founder of loyalty startup Liven says if Facebook succeeds in launching Libra midway through next year as planned it will boost startups in the sector.
Liven raised $10 million earlier this year for its dining rewards platform in which its 500,000 users earn cash rewards for eating out and can use Liven’s digital currency, LVN tokens, to buy food and drinks.
Giving Users a Crypto Incentive
Wong is back at her desk after spending a week on entrepreneur Richard Branson’s Necker Island with the Virgin founder and some of the Facebook team behind Libra. She believes Liven will complement the cryptocurrency when it is launched.
“We basically give people a real business incentive,” she says. “Why are restaurants working with us? Why are customers using us, not because of Bitcoin, not because of crypto, but because it helps them make life easier.”
Wong says Facebook is trying to target the billions of people who are “unbanked” without credit cards or bank accounts and so can use Libra to make and receive payments.
Lending legitimacy
Alan Tsen, chair of Fintech Australia, says established players such as Facebook entering the market validates interest in blockchain technology and cryptocurrency.
It’s a view shared by Kain Warwick, founder of synthetic asset trading platform Synthetix, who pivoted his startup last year from a stablecoin offering (a cryptocurrency designed to minimise volatility).
“Part of the reason we pivoted was we saw this trend emerging of large multinationals like JP Morgan and Facebook moving into this space,” he says. “It lends legitimacy that this is a sector it is worth paying attention to. That provides opportunity for other startups and fintechs in the space to get attention.”
Regulatory Concerns
United States regulators are very skeptical of the motivation for Facebook for launching a payments network.
Warwick says we are in the midst of a “crypto Spring” with increased volume on exchanges and Bitcoin back over $10,000, its highest value since mid 2018.
However, he warned it still remains to be seen as to whether Facebook can launch from a regulatory perspective.
“United States regulators are very sceptical of the motivation for Facebook for launching a payments network,” he says.In contrast Warwick says Australian regulators have been “fairly permissive” when it comes to cryptocurrencies.
Regulators are watching Facebook closely with the tech giant’s head of blockchain projects, David Marcus, testifying before the Senate Banking Committee and the House Financial Services Committee in the US last week.
Marcus faced criticism for plans to headquarter and regulate the Libra Association in Switzerland.
A spokesperson for Facebook Australia declined to comment on Libra’s launch in Australia.
Why Banks should fear Facebook’s Libra?
“The next stage will be to gather feedback and work through our proposals with global regulatory bodies,” the Libra spokesperson said.
Wong concedes some customers are sceptical about Facebook’s involvement in cryptocurrency given the concerns that have been raised about privacy and trust at Facebook.
“That’s because people don’t understand the fact that Facebook doesn’t own the currency,” she says. “Facebook is just one of many other founding members. For Facebook it is actually the best approach because people don’t trust them, with a block chain it is all about transparency and about accountability.”
Sydney Morning Herald
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