It is being reported that social media giant Facebook is putting the pieces into place for the launch of its own native cryptocurrency in the first quarter of 2020. The reports, which have not yet been confirmed by the company, say Facebook’s cryptocurrency is currently being called ‘GlobalCoin’. It is expected that Facebook will officially reveal at least some details at some point over the summer and that testing for an early 2020 launch that will initially include around 12 countries will begin towards the end of this year.
It is believed that the idea behind GlobalCoin is that it will become integral to Facebook further developing its capacity for payments to be made via its Messenger and WhatsApp messaging platforms. And perhaps also for ecommerce hosted on the main Facebook platform itself.
Facebook CEO Mark Zuckerberg is said to have recently met with Bank of England governor Mark Carney to discuss opportunities, risks and regulatory considerations around GlobalCoin. Similar meetings are also thought to have been conducted with the U.S. Treasury and major international money transfer networks such as Western Union.
India is thought to be considered a key market, with the company envisioning expat Indians working abroad using GlobalCoin to make remittance payments to home over WhatsApp. However, it may also prove to be one of the most problematic regions when it comes to working with local regulators, who are particularly hostile to virtual currencies. There have even been rumours of the government again considering a complete ban.
While there are, as yet, few concrete details, it is believed that Facebook’s GlobalCoin is most likely to built on a more centralised example of blockchain technology than cryptocurrencies such as Bitcoin, which rely on a p2p network. This would make it more like Ripple (XRP), the cryptocurrency platform for payments developed to be compatible with mainstream financial services.
It is also speculated that Facebook’s crypto will be an example of a ‘stable coin’. Stable coins are linked or pegged to a fiat currency, which protects them from the same volatile fluctuations in value as standard cryptocurrencies. This is probably a practical requirement if Facebook hopes that GlobalCoin will be used for payments and remittance transfers. Few users would be willing to risk using the cryptocurrency if there was a reasonable chance the value of their transfer could lose 10% or more between being sent and cashed out in fiat currency.
Cynics are already calling Facebook’s move an attempt to cash in on ‘blockchain’ and ‘cryptocurrency’ as buzzwords and that their system will be more akin to digital wallets like PayPal than a genuine cryptocurrency. Practically speaking, that might well be the case. However, the development is nonetheless a further boost for the wider cryptocurrency market, which has sprung back to life in recent weeks after more than a year in the ‘post bubble wilderness’.
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