Zuckerberg says Libra can boost Facebook’s revenue through ads, China sees it as much bigger.
Facebook CEO Mark Zuckerberg explained during a shareholders meeting how the cryptocurrency project Libra will help the social media giant make money. China, on the other hand, has published a book addressing Libra’s challenges, arguing that cryptocurrency could become the new world currency.
In a published transcript by Thomson Reuters, we can read that Zuckerberg responded to a question asked by a shareholder about how Facebook will make money from the cryptocurrency project Libra. Zuckerberg responded by analyzing Libra’s potential impact on e-commerce on Facebook and its impact on advertising revenue.
According to the CEO of the social media giant, Facebook does not charge a price set for ads and instead works with a bidding system, in which all companies that try to advertise bid to compete for the ad space. The system, said Zuckerberg, allows them to obtain the “lowest possible price”.
He added that combining ads with an effective payment tool, like Libra, can further benefit business as it can make trade more efficient:
“If we can make commerce more effective for companies, when they run an ad, someone who clicks on it may be more likely to buy something, thanks to a very effective form of payment.”
Advertising on Facebook, as such, becomes more valuable to companies, which in turn can see them bid higher on ads and raise overall prices. This would effectively increase Facebook’s advertising revenue.
Zuckerberg also reiterated other Libra advantages, pointing out that the payment infrastructure “has not been updated in a long time”. China, which plans to launch its own digital currency called DCEP, sees Libra as more than a way for Facebook to make money.
According to China, Pound could become the new world currency
In a book published by the Central School of the Party of China to educate government officials about digital currency and propose political measures to address emerging challenges, experts say that Libra is an excellent example of public-private partnership and has the potential to become the new world currency.
That would mean, according to the book entitled “Discussing digital currency with key officials,” that the Pound could hinder the Chinese government’s attempt to increase the yuan’s influence.
Hongzhang Wang, former president of China Construction Bank and one of the authors of the book’s preface, said in a recent article:
“China originally relied on mobile payment to move forward, but now Libra has the potential to change the game again.”
Wang added that this would allow companies in the U.S. to build a digital currency system that could “threaten or even outperform” Alipay and WeChat Pay using blockchain technology.