Even if it fails as badly as Facebook’s first online currency, plugging a network of 2 billion users into crypto is going to have a huge impact.
Facebook is getting into the blockchain space in a big way. The move has been rumoured for months, but now, finally, the first reliable details are emerging.
The project, earlier nicknamed ‘Libra’, is being referred to within the company as GlobalCoin. Not much is known about the tech that will underpin it – for example, whether Facebook will develop its own blockchain or use an off-the-peg solution or fork; whether it would be PoW or PoS; how centralised it will be and whether users will have the option of managing their own private keys, and so on. But we do now know a few things about how it is going about this landmark development for crypto:
- It’s set to launch to around a dozen countries in the first quarter of next year.
- Facebook has sought guidance for the project from Bank of England governor Mark Carney, as well as regulatory help from the US Treasury.
- It’s in talks with Western Union and other money transmission services.
- Discussions are apparently also being held with online merchants, with the aim of reducing payment processing fees.
- The US Senate and Banking Committee has expressed concerns about consumer protections and how user data will be secured.
- The coin is rumoured to be backed by several real-world currencies to prevent the volatility for which cryptocurrency is notorious.
Facebook tried launching Facebook Credits around ten years ago, but the currency never really caught on – it didn’t offer enough to the social network’s users to make it worth switching from regular payment options. But this time, it could be different.
For a start, Facebook is bigger than it was a decade ago. A lot bigger. The platform has over 2 billion monthly users. It spans the globe, meaning there’s an instant use-case for money remittance and efficient cross-border payments. And crypto has been seeing a lot of buzz recently.
Add to that the reality than regular crypto like Bitcoin has a few tens of millions of users, at most, and you’re looking at a lot of exposure for the sector. Which means that even if GlobalCoin fails, it’s going to be a great thing for crypto overall.
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