Facebook Inc. (NasdaqGS:FB) is a wreck.
And Libra – the global cryptocurrency it wants to establish?
Let’s just say it’s a four-letter word that I can’t use in this column. And, leave it at that.
Thankfully, though, there’s another company with digital monetary aspirations you’ll want to own.
It’s bigger, better and well established.
What’s more, the company I’m recommending recorded profits of $16.75 billion last year alone.
What You Need to Know
eBay, Stripe, Mercado Pago, PayPal, Visa, and MasterCard… they’ve all come.
That’s six big Libra corporate backers – out of 28 total – who’ve voted with their feet and left the Libra project before it’s even gotten to the starting gate, according to various news sources. It’s also proof-positive that my original take on Facebook’s digital currency aspirations last spring was correct.
Libra’s simply not ready for prime time.
Team Zuckerberg has almost single-handedly managed to incur banker-like levels of consumer wrath in a fraction of the time that the big financial institutions did.
Corporate backers worry that the company simply isn’t ready to withstand the regulatory scrutiny but a really worried about the negative blowback they’d experience in their core businesses for having tied up with Facebook.
The last thing the world needs is “Zuck Bucks” enabling yet another form of money laundering, illicit purchases, and problematic privacy practices.
Tell me with a straight face you didn’t understand and I might give you a pass… barely.
Every currency is based on trust, and it doesn’t matter whether we’re talking about traditional payments or newfangled digital monies. Any exchange mechanism is kaput the moment that evaporates.
I think it’s very telling that the biggest, best payment providers in the world today have all voted with their feet, only days before the Geneva-based, Facebook-formed Libra Association was scheduled to convene. Despite widely publicized and carefully crafted PR statements, the read between the lines message is that they simply don’t trust Facebook any more than we do.
With good reason.
Facebook champions privacy and consumer protection, yet repeatedly stomps all over the very things and people it’s supposedly safeguarding.
No matter what Facebook says or how it tries to explain its desire to reduce cross-border banking costs by providing money to the underbanked, Libra has all the hallmarks of a sham.
Facebook, like any other company, is trying to create a payment mechanism that induces customers to shop through its network. Only, there are several billion people involved.
This goes way beyond a grocery club or rewards points. Even if just 1% of Facebooks users sign up, you’re talking about 20 million people, give or take.
All of whom would immediately be at risk.
According to a joint report by the Stanford Center for Longevity and the Better Business Bureau and the FINRA Investor Education Foundation, 91% of all scam victims engage when exposed to fraudulent information via social media, while 53% lost money.
The lonely, the isolated or those under financial strain are particularly at risk according to the report which makes the Facebook Libra situation so dangerous. According to the FTC, millennials alone have reported nearly half a billion in losses from online fraud in the past two years!
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Thankfully, there’s an alternative: Visa Inc. (NYSE:V).
It’s been a favorite of mine for years and justifiably so… Full story at TotalWealthResearch.com