Facebook recent drive towards the development of its cryptocurrency has been the talk within the crypto community. The tech giant have been making an aggressive recruitment strategy as speculations reveal that several tech companies have committed to its blockchain project.

There have been a largely negative perception from within the crypto community with several analysts. It has been widely claimed by many that Facebook coin goes against the ideals of cryptocurrency as it would be a centralised cryptocurrency.

Popular Bitcoin analyst Andreas Antonopoulos has a contrary opinion as he believes the launch of a Facebook coin could cause a ripple effect in the banking sector.

Speaking at the London Coinscrum Meetup gathering Antonopoulos provided different analogies about the impending launch of Facebook coin.

Facebook Would Face Legal Issues In Developing An Open Source Cryptocurrency

Antonopoulos revealed that Facebook would face difficulties in building an open source decentralised cryptocurrency due to the legal restraints.

The crypto analyst is right as Facebook as a legal entity bound by laws would be unable to allow unrestricted cross-border transactions on its blockchain platform without running into legal issues.

There would be serious repercussions on its business model which would not serve in the best interest of the tech company.

Bitcoin has an advantage in this area as the premier coin does not have restrictions over jurisdiction and can be easily transacted across different regions. Its decentralised nature means that the coin would remain ahead of a potential Facebook coin.

Banks Most Likely To Be Affected By Facebook Coin

Meanwhile, Antonopoulos claimed that traditional banks are the ones that have to be worried about the potentials of Facebook coin. According to him, if Facebook coin is proven to be successful and profitable there would be a slew of coins coming out from Silicon Valley.

Banks would be forced to compete as they would no longer hold the position of financial institutions with progressive technology. Silicon Valley would win the war of financial innovations as these companies have perfected the art of user experience and interface. This could result in a reduction in profit margins of close to 10% which could get progressively worse in the long run.

Antonopoulos makes a lot of sense in his analysis of the potential fallout in the Banking sector if Facebook launched its coin. However, several banks have begun to make the jump on cryptocurrency with Ripple solutions used by a number of top banks across the world.

It remains to be seen how Facebook coin would work as information has been kept tight by the tech company.