What Facebook cryptocurrency means for traditional banking

CEO of financial advisory firm deVere Group says Libra is the beginning of the end for banks

Tech giants entry into cryptocurrency sector indicates that digital money is fully mainstream.
Tech giants entry into cryptocurrency sector indicates that digital money is fully mainstream.

Facebook’s jump into cryptocurrencies is another nail in the coffin for traditional banks, says the CEO of independent financial advisory firm deVere Group.

Nigel Green was reacting after the social media giant last week set out details of Libra, its own digital currency, to be launched next year.

According to Green, Facebook’s launch into cryptocurrencies tells us two things:

First, the role of traditional banks will decline at a quicker rate than many had previously predicted, he says. “Facebook’s Libra cryptocurrency will be able to transact across traditional payment rails. They have partnered with PayPal, Mastercard, Visa and Stripe, amongst others to fuel merchant acceptance of the digital currency.

“If you have cryptocurrency on these payment methods, the purpose of and use for traditional banks will surely shrink.

“Cryptocurrencies and fintech [financial technology] solutions are already taking business away from banks.  They are filling a gap left by the traditional way of doing things as the world speeds up and becomes increasingly globalised and digitalised.

“The jump into cryptocurrencies – which are the future of money – by Facebook which already has 2.7 billion users can really only be seen as another nail in the coffin for banks.”

He continues, “Second, tech giants entering the cryptocurrency sector indicates that digital money, as a concept, is fully mainstream and inevitably the way the world is going.  This is something we have been arguing for a long time now – despite protestations from financial traditionalists.

“Where Facebook leads, others will inevitably follow, and this will quicken the pace of mass adoption of cryptocurrencies.”

The deVere CEO concludes: “This is a major development in the crypto-verse and it is surely just the beginning. This is set to revolutionise how people access, manage and use money across the world and it will positively disturb the wider banking sector. Banking as we have known it until now is coming to an end.”

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