Facebook and Twitter are undoubtedly the two Social Media Giants of the western world. Facebook’s reach is more extensive and stronger with subsidiaries like Instagram and WhatsApp. Nevertheless, while Facebook lacks trust, Twitter is one of the most trusted social media platforms.
The benefits that blockchain and cryptocurrencies present are massive. However, more often than not, hype and greed lead to unstable conditions in the cryptocurrency markets.
Numerous times we have heard about any of the FAANG firms adopting cryptocurrencies. Facebook was the first among them to make a move. Expectedly, it caught the attention of many.
Moreover, the two giants also have a responsibility of not creating FUD or FOMO. Facebook attempted to over-come the volatility issue using a stablecoin. However, Libra announcement shook the cryptocurrency markets and raised eyebrows of Central Banks and lawmakers all over the world. This is because it presented another issue: a threat to the sovereign powers of Federal Reserves.
Central Bank Authorities all over the world, including G7 members, have continued to oppose the design. The significant problems that Libra presents are the following:
- Privacy and Trust Issues given Facebook is the forerunner of the Libra Association
- The threat to the Federal Reserve or Treasury as people might be motivated to move their money out of the national currency.
- Money Laundering and terrorist financing.
One other hand, Twitter CEO, Jack Dorsey, found Square – a Financial Services platform that provides loans and payment solutions. The Cash App by Square offers Bitcoin transactions. Recently, the firm announced its expansion and increased investments to develop products, especially around Bitcoin. Currently, Square has popularly been known for its credit card POS dongle for smartphones.
The Cash App has reported ‘sky-rocketing’ growth from the past three years. The total revenue from Bitcoin to the firm during the quarter was $125 Million. Bitcoin transactions on the App contributed to 48% of the earnings from the Cash App in Q2 of 2019. The quarterly report also cited,
During the quarter, bitcoin revenue benefited from increased volume as a result of the increase in the price of bitcoin and generated $2 million of gross profit.
However, Facebook’s plans with Libra seem to have come to a halt. Mark Zuckerberg, the founder, and CEO of Facebook had reassured the media that,
Building a financial system is not something a company can do by itself… We helped played a role in helping to stand this up. But Libra Association is an independent organization…
Square Cash is also planning on financial inclusion, but loans and Bitcoin adoption drive its’ growth. Currently, Square Capital (loans and FS) is the most massive earning arm of Square. Nevertheless, the Cash App and Square Crypto’s Bitcoin inclusion plans have big a future planned for the firm.
Jack Dorsey is driving to increase financial inclusion with the Square Project. While Square Cash is currently projecting a loss 2019, its motivation towards building feasibly financial solution, most importantly with Bitcoin, is making a strong case for it. Darrin Peller, a managing director at Wolfe Research, told the media that,
“There are a number of revenue drivers they have, such as Cash App, that are going to be spooling into revenues going into 2020,”
Furthermore, while Facebook’s planning to launch its stablecoin, Square is working with already established cryptocurrencies.
Will Jacks’ working model turn successful while Libra is entangled in the regulatory mesh? Please share your views with is.