The Facebook cryptocurrency Libra announcement earlier this week is a key sign that traditional banking is on the decline, according to the CEO of a leading independent financial advisory organisation.
Nigel Green, founder and CEO of deVere Group argued that the social media giant’s unveiling of Libra, which will be launched in 2020, showed that “the role of traditional banks will decline at a quicker rate than many had previously predicted”.
“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,” he said.
“If you have cryptocurrency on these payment methods, the purpose of and use for traditional banks will surely shrink.”
He argued that this shift from banks to cryptocurrencies was already beginning to happen – but would only intensify once Libra began to be used.
“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,” he said.
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“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.”
Facebook cryptocurrency Libra: A sign that money is becoming digital?
Green also argued that the move showed that money in general was seeing an overhaul – moving from traditional systems to a digital framework.
“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,” he said.
“Where Facebook leads, others will inevitably follow, and this will quicken the pace of mass adoption of cryptocurrencies.
“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.”