Facebook FB is going ahead with its plans regarding Libra, its global digital currency, despite the shrinking partner base.
Notably, founding members including Mastercard, Visa, PayPal, eBay, Stripe and Mercado Pago, have decided to drop out, apparently due to stern regulatory scrutiny.
Nonetheless, the remaining 21 partners, comprising Coinbase, Uber, Spotify, Vodafone, Lyft, among others, recently inked a deal in Geneva to be part of the Libra Association — the governing body of Libra.
Notably, per the new charter, members have the liberty to leave the association at any time.
Libra’s Attempt to Democratize Blockchain Holds Promise
Tech companies including Facebook are exploring every avenue to unlock the potential of blockchain and revolutionize the functioning of industries including payments, banking, retail, healthcare, logistics, utility and transportation.
Blockchain is much faster than legacy technologies in completing a transaction due to the absence of manual processing or authentication by intermediaries as it utilizes a distributed consensus.
Moreover, the system is anticipated to be incorruptible and meant to provide unaltered information. Consequently, the possibility of monetary losses is low with minimal chance of double counting and hacking.
According to IDC, spending on blockchain solutions is expected to hit $15.9 billion in 2023 at a CAGR of 60.2% between 2018 and 2023. It is estimated to be $2.7 billion in 2019, up 80% over 2018.
Facebook based on Libra is expected to enjoy a first-movers’ advantage in this regard. The company aims to roll out Libra as early as June 2020. Notably, per reports, CEO Mark Zuckerberg, is slated to discuss the project with the United States House Committee on Financial Services, on Oct 23.
Facebook’s Libra is aimed to be a stablecoin, which implies it will be less volatile than other cryptocurrencies as it will be backed by real assets, including a basket of bank deposits and short-term government securities. Libra’s low-fee transaction is likely to act as the chief allure for consumers.
Facebook carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Apart from Facebook, International Business Machines IBM, Microsoft MSFT, SAP SE SAP, and Accenture ACN, are expected to gain from their efforts in the blockchain domain.
Year-to-Date Price Performance
IBM Fortifies Blockchain Portfolio
IBM leverages Hyperledger technology and can be considered a pioneer when it comes to providing enterprise blockchain applications. Notably, IBM-Maersk co-owned TradeLens blockchain platform has gained significant adoption among logistics providers.
Moreover, IBM recently rolled out next-gen of IBM Blockchain Platform, which is anticipated to aid the company in sustaining leading position in the enterprise blockchain market.
IBM has a Zacks Rank #3 (Hold).
Microsoft Azure Blockchain Services Gain Traction
Microsoft has rolled out a fully-managed Azure Blockchain Service to accelerate development of robust blockchain-enabled smart contract applications. The flexibility in usage and Azure’s secure broad-based availability are anticipated to bolster adoption of the service.
The tech giant has joined Hyperledger community and entered into a partnership with J.P. Morgan to develop Ethereum-based open source blockchain platform, Quorum.
Microsoft has a Zacks Rank #2.
SAP & Accenture Advance Blockchain-based Supply Chain Efforts
SAP is enabling developers to design and run blockchain applications by utilizing Hyperledger Fabric via its SAP Cloud Platform Blockchain service. Moreover, the company is advancing efforts in pharmaceutical supply chain space with the aid of blockchain-based SAP Information Collaboration Hub for Life Sciences, to help remove counterfeit products.
Notably, SAP Leonardo offering integrates IoT, Big Data, ML, Analytics and blockchain capabilities on the SAP Cloud platform. The solution has been witnessing traction of late.
SAP carries Zacks Rank #3.
Meanwhile, Accenture has partnered Mastercard, Everledger, Mercy Corps and Amazon Web Services with an aim to develop supply chain capabilities and provide customers a seamless shopping experience.
Moreover, Accenture has collaborated with Generali Employee Benefits (GEB) to build blockchain-based solution to streamline employee benefits.
Accenture carries Zacks Rank #4 (Sell).
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