The social media giant, Facebook is finally coming out about its involvement in the crypto space to the public, as it finalizes plans to launch its very own cryptocurrency by next year. According to a news report, Facebook plans on launching its own payment-focused cryptocurrency, the “Global Coin” in 2020 and the tests for the forthcoming digital currency are scheduled to take place by the end of this year only. The goal behind this alliance is to search for a way to provide affordable access to money transfer services, specifically for the unbanked population.
Reportedly, there have been several high profile meetings regarding the project under development. Facebook founder and CEO Mark Zuckerberg had a meeting with Mark Carney, the governor of Bank of England, only last month. The agenda of the meeting was to discuss the prospects and the risks involved in its cryptocurrency launch.
In addition, the social media firm also consulted with the United States Treasury officials regarding operational and regulatory matters, since regulation will definitely be one of the key hurdles with the new cryptocurrency. Purportedly the consultation focused on identity check procedures and mitigating money laundering risks.
Furthermore, Facebook is also involved in ongoing discussions with the global payments services provider Western Union. Facebook’s aim is to engineer a digital currency that can bypass banking networks in order to provide an affordable and a secured payment method, regardless of whether the users have a bank account or not. In order to achieve this task, the platform will have to seek cooperation from banks and brokers across the globe in order to acquire access to currency exchange services.
As it turns out, this is the motivation behind the much talked about and mysterious project Libra. Libra Networks LLC was registered in Geneva on May 2 by Facebook Global Holdings II LLC and per the official filing, the firm provides:
Services in the fields of finance and technology, as well as the development and production of software and related infrastructure, in particular in connection with investment activities, the operation of payments, financing, identity management, data analysis, big data, blockchain and other technologies.
Facebook’s Crypto: A long Time Coming
The social media giant has been in the limelight quite a lot lately with respect to its continuous involvement in the crypto space and despite the rumors/speculations it hasn’t shied away from making its way into the crypto space on its own terms.
Only earlier this month the platform hired two new compliance experts who formerly served at the United States-based digital currency exchange Coinbase. Both Mikheil Moucharrafie and Jeff Cartwright, are now serving with Facebook; the former as compliance officer for blockchain and the latter as a policy and compliance manager. And even though the platform didn’t specify the reason behind the two new team members, people assumed it was a step towards Facebook’s secret crypto endeavor.
Furthermore earlier in May Facebook was seeking investment worth a whopping $1 billion, for its rumored cryptocurrency project. Reportedly, the platform went as far as holding talks with major payment networks Visa and MasterCard about potential support.
Additionally, this May the social media platform announced that it had decided to lift the restrictions imposed on crypto and blockchain advertisements on Facebook. And yet again people were quick to point out that the relaxation in restrictions also coincides with Facebook’s plan to launch its own cryptocurrency.
Its safe to say that Facebook’s Globalcoin didn’t come as much of a surprise for the people as they were already following the crypto trail of the platform. But what people didn’t expect is probably the Globalcoin itself because all the rumors were focused on a stable coin dubbed the “Facebook Coin”. However, according to reports, Globalcoin is supposedly the coin’s current name within the company, it has not been confirmed that it will retain the same name once development of the project is completed.
Will a Facebook currency work?
Everything seems planned out for the Facebook cryptocurrency, which only leaves one question, will it work? Blockchain expert David Gerard, revealed that Facebook would gain access to valuable spending data by creating its own payment system.
He was dubious as to why does it need to virtually mint its own digital money in order to gain that data? Gerard suggested a different route for Facebook, could create a platform like PayPal, which allows users to transfer traditional currencies.
In addition to that, there is no doubt about the fluctuating nature of cryptocurrencies, which could be a hindrance to the success of Facebook’s Globalcoin. However there are some that believe this could change the fate of cryptocurrencies as we know it. Garrick Hileman, a researcher at London School of Economics, said the Globalcoin project could be one of the most significant events in the short history of cryptocurrencies.