Local bankers took an interest in the news that Facebook legitimized cryptocurrency as more than a fad according to local Canadian Imperial Banker Brendan O’Donnell.
“I think it is a big step to see corporations get into the banking sector.” said O’Donnell.
The CIBC securities advisory and fraud prevention department also got on the line to help people understand that banking is a tricky business. With Facebook already dealing with privacy and fraud issues, questions remain about the security of the new Libra currency and how it will be handled.
If Facebook’s account management is similar to a traditional bank’s, then having more than one account on Facebook may trigger an alert to the bureau, and may cause some accounts to go “dormant” said Marissa, who is an expert on the matter.
Getting resolution on the accounts can also be a challenge, especially for firms who deal with multiple users in one account because suddenly the permissions of use also need to be negotiated.
The blockchain will be a very good model for combating piracy and managing accounts because Facebook could potentially force users to adopt the currency in order to maintain their accounts. In some ways, users will lose some freedoms, but they will also gain other freedoms.
Facebook is not the first social media platform to use cryptocurrency, but it is one of the largest. Steemit, Reddit, and others have been using their form of tokens and cryptocurrency with great success, but their platforms do not have the messaging systems built-in like that of Facebook’s.
Blockchain technology companies are on the rise, and this recent major adoption of blockchain technology from Facebook sends a major message to the private banking industry about the question of how currencies are valued, and also how they are regionally branded.
To brand a currency by region has been the most traditional method of colonial establishment, however with the possibility to overcome physical borders using networked currency, Facebook’s Libra and other blockchain currencies may have the power to significantly strengthen and weaken national banks’ and national currencies themselves.
This is a major signal from the telecommunication and information communications technology companies that data itself is a currency, and the users of the network create the value of the network based on the cryptocurrency the powers it’s blockchain.