Facebook’s Digital Currency ‘Libra’ Is Likely Inspired by Chinese Digital Payment Systems

Facebook is looking to transform its social media platforms with its own cryptocurrency, Libra. A deeper look, however, tells us that the tech giant is actually taking cues from China and giving it a cryptocurrency twist. WeChat has been transforming its messaging app for payments with great success ever since 2014. Facebook’s main focus is leveraging Libra for its messaging platforms, like WhatsApp and Messenger. This sounds awfully similar to what Tencent’s WeChat has already done. In the past few years, the Chinese app has robustly expanded to become the second-largest mobile payment system in the entire country through WeChat Pay. Back in its beginnings, it was first used to send ‘red packets’ to celebrate the Lunar New Year. With 1.1B monthly users, the company quickly transitioned to payment processing with great success. Now, users can use WeChat to pay for just about everything from electricity bills to lunch. In total, third-party mobile apps processed transactions worth a shocking $23.2T last year. This number is sure to continue to grow as China’s middle class further expands. Facebook is clearly looking to achieve this same level of dominance. However, it has its work cut out for itself. It still has to overcome the regulatory hurdle which is giving the Libra significant pushback. Coupled with existing concerns over Facebook’s privacy, the social media giant is looking at a major legal battle over the next year. China may be hostile to cryptocurrencies but it is far ahead of the West in third-party mobile payments. Practically anything can be purchased digitally in the country with ease. Perhaps Facebook should be focusing less on engineering its cryptocurrency and more spend more time sorting out its social media platforms. In other words, Facebook should take some lessons from WeChat. Do you believe Facebook’s Libra is just like WeChat but with extra steps? Let us know your thoughts below.