Last week, Facebook announced that, in addition to its upcoming Libra currency, a new subsidiary called Calibra will also be introduced. According to Inc, Calibra will offer a digital wallet product which will allow for transactions with Libra currency. Libra may be spent on various materials and used to send cash to individuals through the Calibra wallet, which will be built into Facebook Messenger and WhatsApp among other third-party wallet apps.
Libra already has several global payment companies backing it as founding members, including Visa and MasterCard. Small business owners, however, may be somewhat in the dark about this new form of currency - they may be aware of certain aspects of cryptocurrency, but unsure of how it may impact their Business Pages.
Is it necessary that small business owners start planning now for a cryptocurrency future on the site?
Libra matters, especially if you sell through Facebook Business pages
Henry Stanley, CEO of ICO data analytics company ICOAxiom, doesn’t think entrepreneurs with informational Facebook Pages have much to worry about when it comes to Libra. He does, however, believe that Libra will impact entrepreneurs selling goods via their Facebook Page.
This will ultimately impact more than a social media platform. It will mean adapting across the board for the business.
“Given the size of Facebook, I’m guessing that there will be a large number of users using the coin,” Stanley says. “Business owners should prepare their websites and payment options to include Libra, if they haven’t updated their sites to accept cryptocurrencies already.”
A look at Libra’s benefits
It’s easy to be hesitant around cryptocurrency if you don’t understand how the coins work.
Peter Ryan is the CEO and Founder of Ryan Research. Ryan has led research efforts at CoinDesk, a popular cryptocurrency brand, where he produced data insights, reports, and tools designed to help users understand the digital currency industry.
Facebook Libra, according to Ryan, offers a wide variety of benefits to business owners active on Facebook:
- Access to more customers, especially those overseas - “Facebook could unlock more cross-border commerce by giving its users international money than dealing with the friction of domestic currencies and foreign exchange.” Ryan notes.
- Smoother checkout processes - Currently, online checkout processes are full of obstacles including inputting long credit card numbers and other details. This causes a drop-off of would-be customers - and abandoned shopping carts. eCommerce businesses, as Ryan says, have a lot to gain from Facebook helping streamline the checkout process with Libra.
- Stability of value - “Foreign exchange produces differentials in value,” Ryan says. “If a given currency is weakening in comparison to another, it might not be best for a given business without proper forex mitigation strategies. Libra will be a basket of four currencies, and it will smooth out some of those differentials. This can help preserve, or make it easier, to preserve value.”
Speaking of international benefits…
Software consultant Matt Ferderer believes Libra will largely focus on businesses outside of the United States.
“The U.S. tax system currently makes using cryptocurrency for daily transactions a bit of an inconvenience if you want to properly report taxes. Business owners and customers alike need to track the price of their cryptocurrency when they bought it, and the losses and gains associated when they used it to make a payment.” Ferderer says.
How soon do business owners need to think about Libra?
Still a little puzzled about how Facebook Libra will work for your business?
The good news is that all of these announcements are still in their earliest stages. Ferderer recommends businesses wait to revisit Libra in 2020, and put it on their roadmap then.
“We’ve got about 18 months before the system goes live,” Ryan points out, but still advises companies continue learning more about Libra before the launch. “Businesses should educate themselves on the merits of this technology during this time to decide if it’s right for them.”
However you look at it, Facebook's Libra currency is going to have some impact. We won't know for sure how much, exactly, until it rolls out, but these pointers should help you start preparing for the upcoming launch.