Facebook is looking to launch its own cryptocurrency “GlobalCoin” next year.
Facebook plans to launch its digital money transfer system in a range of countries by first quarter of 2020. They are looking to test it at the end of this year. This could be revolutionary for online money transfers industry.
Their detailed report is coming this summer and has already been discussed with Mark Carney (governor of Bank of England), when they met last month discussing risks and opportunities of launching new crypto-currency.
It sounds like there are a lot of opportunities for Facebook, including integration with all of their messengers and supporting upcoming instagram shopping app. It will be interesting to see how it all works out, because I personally can’t imagine using it myself right now, as I’m too used to sending money to friends and family using my Monzo account.
Facebook is already looking for advice on regulation and operational issues fro officials in US Treasury.
As well as, facebook is already looking for money transfer companies like Western Union as a solution for cheap and fast money transfers without the bank.
How will the “Global Coin” work?
Facebooks aim is to create a digital currency that allows cheap, secure and reliable way to send money online, regardless of utilising the bank. With their current platforms including WhatsApp and Instagram, money transfer addition will open unbelievable opportunities for the company. But will it be accepted by the public? And will they survive the competition with online money transfer providers?
Plus if we look a year back, Facebook was the one to ban all cryptocurrency related ads, and now JP Morgan is looking to develop their own crypto-currency.
However, the idea of converting currencies such as dollars, euros and sterlings etc. into their digital currency, already sounds a bit extreme, cant imagine general public doing that every time they want to send a dollar to a friend for a can of coke.
Speaking of coke, do you recon it’ll spark illegal transactions across the countries?
They are currently looking to create partnerships with merchants to accept the new coin in return for a lower transaction fee.
What are the concerns with “GlobalCoin”?
Facebook has come under fire in recent years over its handling of users' personal data, and regulators are likely to examine the launch closely.
Facebook has already been hit with personal data stick, making the launch of the coin even harder… guess they’ll be monitored and regulate much closer than before. As US Senate and Banking committee has already questioned Zuckerberg about GlobalCoin and how it will work & how user protection & data will be handled..
Facebook has also discussed the process of identity checks and how to reduce money laundering risks with the US Treasury.
In responce, Facebook has already started establishing KYC and identity checks process to reduce the money laundry risks. But.. that was the case with other crypto-currencies, yet, there was and probably still is plenty of money laundering involved.
Facebook claims they want to prevent wild swings in the price of the coin to reduce the temptation of money laundry, by pegging it to already established currencies including US dollar, euro and Japanese yen.
Two times a charm?
It's not the first time Facebook has dabbled in digital currencies. A decade ago, it created Facebook Credits, a virtual currency that enabled people to purchase items in apps on the social networking site. And after all, will people trust Facebook with their new development.
Their previous attempt to create a digital currency “Facebook Credits” to purchase in apps items wasn’t that much of a deal, same goes for other social platforms like Russian VK.
As well as, think of all the regulations that been hitting digital currencies across the globe. Countries like India are now stopping the use of cryptocurrency and are way more inclined to send money online using money transfer service. Meaning facebook will have to overcome these issues to launch it globally.
Will the GlobalCoin work?
Let’s forget about facebook for a second. What deserves the value is the sparked blockchain technology, which can be utilised and bring some real value to the average user, and I find it amazing! Personally I don’t really care about the price and what it does, but the fact that blockchain tech will get some new friction will be awesome!
Blockchain technology can help to slash the time and cost of sending money online across borders by completely eliminating the bank, the middle man.
Lord King, the former Governor of the Bank of England, warned two decades ago that central banks could become "irrelevant" if people started to use digital currencies as pounds and pennies are used today.
Its actually rather funny how Lord King, the former Governor of the Bank of England, warned the public decades ago about digital currencies, stating that banks might become irrelevant if use of digital currencies becomes the norm.
But to run this kind of platform, Facebook will have to build their own blockchain based platform to run the system. Coming from this, realising the complexity of the whole nature, Facebook might turn to the PayPal side of things and develop their own system like PayPal to send and convert traditional currencies, which to some degree makes a bit more sense.
Over issues will include variance in prices, which will cause a lot of frustration and fluctuation for the end user. As “normal” people won’t bother with constant fluctuations of currencies. Can’t imagine my mates or family dealing with it all the time.
To end this, But Garrick Hileman (researcher at London School of Economics), said that GlobalCoin can become a significant point in history for crypto-currencies. He said that 30 million people already adopting cryptocurrency compared to facebook audience of 2.4 billion monthly users.
So what do you guys think about this? Will GlobalCoin be a success or another “facebook credit”?
Would you use this kind of system?
Let me know in the comments :)
And just to say, most of the comments here are my opinions, so feel free to critique me away haha
Here are some more links for you on the topic:
https://www.bbc.co.uk/news/business-48383460
https://www.theguardian.com/technology/2019/may/24/facebook-plans-to-launch-globalcoin-cryptocurrency-in-2020
https://www.marketwatch.com/press-release/best-sectors-to-invest-in-2020-2019-11-11