As per a report by The Information, it is suggested that Facebook is set to unveil its cryptocurrency termed “GlobalCoin” later in this month of June. The crypto to be launched by Facebook will allow users across the world to process crypto transactions through the social media channel. Facebook is one of the biggest social media platforms in the world and the move to launch a cryptocurrency by it is set to generate huge ripples in both the crypto and the traditional financial industry overall.
One of the most prominent aspects to note in Facebook’s crypto coin is the fact that the social media giant is inviting external parties to participate in the ecosystem set up by Facebook, by acting as nodes for a fee which reportedly is as much as $10 million. This will make sure that the decentralization idea of blockchain and crypto world is fulfilled to the core. As per some reports, the company is in talks with various global payment providers and crypto industry players along with the regulators to provide a “regulation-compliant” crypto asset that is best suited to the global audience.
The crypto coin of Facebook is rumored to be launched in 2020 while trials are expected to be conducted later this year. Facebook has been quite active in its blockchain wing. In May last year, the former PayPal president David Marcus was also made the head of Facebook’s blockchain initiatives which shows the platform’s seriousness towards the technological front of blockchain and its desire to excel in it.
Now, the biggest thing to look out for in Facebook’s crypto launched is its probable effect on the nascent space of cryptocurrencies which has a serious negative connotation attached to it in the mainstream media. The negative connotation stems from the fact that the initial use-case of cryptos was largely driven by the illegal usage of cryptocurrencies in activities like money laundering and in illegal marketplaces like the dark web. Owing to this negative connotation, crypto has not achieved the global adoption it aims to achieve as of yet.
Other reasons for lack of crypto adoption include the lack of easy access to cryptos and the lack of regulatory clarity. Since there is no concrete regulatory framework for the crypto world, a lot of scams and frauds have seeped in. Due to this, the institutional investors have also chosen to stay away from the uncertainty of the crypto world.
The general public, on the other hand, has held back owing to the lack of easy access methods for cryptos and the shortage of services related to them in the real world to perform everyday activities. Due to the price volatility of cryptos, majorly bitcoin, it becomes unnatural to use them as a source of making payments. Instead, people hold them, or HODL them, with expectations of their prices rising in the future so that they can trade their cryptos for a better price and gain profit.
With Facebook’s crypto coin, the whole picture will change. Firstly, the coin will expose millions across the globe to the cryptocurrency world. Since Facebook is reported to have over a billion monthly active users, this first exposure will possibly open up a flood gate of new users in the crypto world. People will get their first taste of how digital currencies operate and how transactions happen.
With its usage in sight, other cryptocurrencies might also generate their interest in many thus raising their market caps. People will get their hands-on experience of cryptos which will likely mitigate the negative aura built around it by the mainstream media.
Facebook’s cryptocurrency is also trying to get regulatory legitimacy around the world so that the legal issues and scams are avoided. Lastly, but possibly the biggest significance of Facebook’s crypto coin comes in the form of its stability.
It is a stablecoin as it is pegged to fiat currency in order to take the crypto volatility aspect out of the picture so that better adoption takes place. This will make sure erratic ups and downs of prices, like those seen in bitcoin, do not happen so that users use the crypto instead of just HODLing them.
All in all, the launch of Facebook’s crypto coin is expected to be a positive move for the better adoption of the crypto world and its exposure. Despite the positive-ness, it will be interesting to see how this new cryptocurrency disrupts the market of other cryptocurrencies already present.