Ecommerce Challenger Shopify Links Up With Libra

Ecommerce Challenger Shopify Links Up With Libra

almost 4 years ago2 mins

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After a slew of exits in recent months, there was some good news for Facebook’s “cryptocurrency” project Libra late last week as it welcomed much-fancied ecommerce upstart Shopify on board 🛍

What does this mean?

Shopify provides the tech for a million small retailers’ online businesses, linking up buyers with sellers who’d rather not use Amazon’s services including shipping fulfillment. (Check out ourRetail Pack for more on the sector.)

Rapid revenue growth saw the Canadian company’s stock price triple last year, rising further this month after Shopify posted its first-ever quarterly profit.

Shopify’s stock was on a roll in 2019
Shopify’s stock was on a roll in 2019

But shares fell 5% on Monday after Shopify said it would become the first firm in four months to join the Libra Association, stressing the advantages such a payments system – previously vacated by the likes of PayPal andeBay – could offer in terms of scale and accessibility 🐳

Why should I care?

US ecommerce sales are growing far faster than their in-store equivalents – and much of Shopify’s success has been driven by retailers selling through Facebook-owned Instagram. Partnering on a private currency could help avoid credit card fees – and potentially open Shopify up to those without a traditional bank account.

US ecommerce sales rose 15% last year
US ecommerce sales rose 15% last year

Interestingly, Intercontinental Exchange – owner of crypto exchange Bakkt**** recentlyacquired customer loyalty platform Bridge2** Solutions while passing over the under-pressure eBay, perhaps suggesting it too sees crypto as part of the payments network of tomorrow 🤔

Central banks may have something to say about that, however. Sweden’s is now trialing its own blockchain-based digital currency – and a senior Bank of England official called over the weekend for the UK to follow suit. But Ukraine, which ran its own emoney pilot way back in 2018, believes central banks could supervise digital transactions just as well as distributed ledgers.

One thing seems clear: banking authorities are unlikely to let the likes of Libra and Shopify operate their own “cryptocurrencies” without significant regulation at the very least. Watch this space… 👀

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