Amazon must Launch its Own Cryptocurrency
It would make sense for Amazon to choose this option.
In June 2019, Facebook finally put an end to the suspense by officially launching its cryptocurrency project. The rumor had been circulating for several months and finally, Mark Zuckerberg’s company put an end to all his rumors by unveiling Libra his project for a homemade Blockchain.
Of course, Facebook has done everything to show that it is not directly involved in Libra by detailing a mode of governance that would be totally independent of the parent company. Thus, Libra will be managed by the Libra Association. It is simply a Geneva-based non-profit organization with 27 partners already in place.
The conditions to join this association were rather drastic since it was necessary to inject a minimum of 10 million dollars while meeting a certain number of very precise technical criteria in order to become a node of the future Libra Blockchain.
In front of Libra’s immense potential, the partners flocked in and in the end, we find very big names among the 27 founding members with for example Mastercard, Visa, PayPal, Uber, Coinbase or Ebay. In short, everyone wanted to be part of the adventure for fear of missing “The Next Big Thing” in the world of cryptocurrencies!
A problem of trust in Facebook
While the Libra Blockchain seems to meet a number of criteria for independence from Facebook, the core of the problem is the wallet application Calibra, which will be integrated by default into Facebook Messenger, Instagram or WhatsApp. Although Facebook denies it, it is likely that Facebook can actually have access to all your transactions made in Libra.
Mark Zuckerberg and his team defend themselves by pointing out that Calibra can be replaced by third-party wallet applications to perform transactions in Libra. Nevertheless, it is likely that most users will use the default Calibra solution. The problem therefore remains unresolved.
The Cambridge Analytica case and other privacy scandals that have splashed Facebook for many months have clearly undermined consumer confidence in Facebook. A strong sense of mistrust has developed and it is no coincidence that the growth in the number of Facebook users in the United States has stagnated for several months now. Under these conditions, the launch of Libra and its success no longer seem to be fully guaranteed.
Everyone trusts Amazon
On the other hand, Amazon, Jeff Bezos’ company, has a very high brand image. It’s very simple, everyone trusts Amazon. The fact that most users agree to let Amazon store their credit card information to speed up their future purchases is clear evidence of this.
As an e-commerce giant, Amazon has every interest in launching its own cryptocurrency. I would even say that the use cases appear to be more obvious in the case of Amazon. Trust in Amazon would therefore do the rest and would probably lead to greater public acceptance. We would therefore be at the opposite of the mistrust and questions raised following the launch of Libra by Facebook.
In any case, it is obvious that Amazon has been working on this issue for many months. Jeff Bezos’ company must therefore carefully observe the situation of Facebook’s Libra and more particularly its reception by the regulators of the major economic powers.
G7 Finance curbs Facebook’s ambitions
The G7 Finance Group, which brings together the finance ministers of the seven major world economic powers, met on 18 July 2019. On the agenda: Facebook’s Libra and the position of these different countries in the face of the risk of seeing the development of an alternative currency independent of the yoke of the central banks of these countries.
Facebook’s Libra has achieved the feat of building an uncompromising consensus among the G7 countries. For them, Facebook is not trustworthy. The Cambridge Analytica case was again put forward to justify this total lack of trust in Mark Zuckerberg’s company.
The members of the G7, led by the United States, stated that “the Libra project will not be able to start until we have obtained clear answers” and that Mark Zuckerberg’s network will have to respect “the highest regulatory standards, particularly in the fight against money laundering and consumer protection”.
Faced with such reluctance, the launch of the mainnet of the Libra Blockchain planned for the beginning of 2020 appears to be more and more compromised. If Facebook tries to persist in this path, it is likely that the American regulator will take even stronger decisions against Mark Zuckerberg’s company.
Amazon must take the opportunity to launch its own cryptocurrency
The difficulties encountered by Facebook should encourage Amazon to position itself and launch its own cryptocurrency. Indeed, the main thing Facebook is criticized for is the lack of trust in its practices. However, this problem does not arise with Amazon, which benefits from an excellent brand image. No scandal has broken out in Jeff Bezos’ company so far.
In addition, Facebook is accused of wanting to launch its Libra Blockchain unilaterally without a thorough preliminary test phase with which the major world powers would have been associated. Taking advantage of this major mistake of Facebook, Amazon must position itself by proposing the creation of an experiment of its own cryptocurrency system putting in the loop the regulators of the great world economic powers.
By doing so, Amazon would reassure regulators by showing white paws. This would be the best chance for such an initiative to emerge and reach the stage of global use in production.
Libra is a nice initiative but launched by the wrong company. Amazon is the company that can allow such an initiative to grow and move beyond the project stage. For me, it’s clear, Amazon must launch its own cryptocurrency and I think Amazon will do so in the coming months.