According to WSJ, Facebook has brought several companies in its Libra Association, which include Visa, Mastercard, PayPal and Uber, who all have agreed to back Global Coin. Each of them will be contributing $10 million to the association whose sole purpose will be to govern the Global Coin. But there is one thing that is concerning the crypto industry and that is what if Facebook distribute its GlobalCoin power among its backers who are all massive corporations themselves.
Facebook, the social media giant, hasn’t revealed many details about its crypto project, Libra, but this doesn’t mean that the company isn’t taking the project seriously. In fact, Facebook is collaborating with other massive giants such as Visa and Uber to ensure that its Global Coin, flourish. Prior to Facebook’s coin launch, the company has made a smart move to convince major payment companies for contributing financial support.
While crypto and blockchain advocates are appreciative of Facebook’s crypto project which can make cryptocurrencies mainstream, there are several personalities on the other end as well, opposing the initiative taken by the world’s largest companies. Executive Director of Open Privacy, Sarah Jamie Lewis is one of those who disapprove the consortium of corporations as she believes that the members of consortiums will be given the entire control in the near future.
“Facebook won’t control the coin” it will just develop the coin and then assemble the initial members of the consortium after which point the power will be distributed to the consortium members, that Facebook picked, and who are all large corporations.
See, decentralized. pic.twitter.com/wtdJlA85Ic
— Sarah Jamie Lewis (@SarahJamieLewis) June 14, 2019
The consortium, that will go by the name Libra Association, is expecting the inclusion of more members. It was suggested that Facebook and consortium members will not be controlling the stablecoin. However, there might be some members who would be capable of operating nodes on the network.
Once finalized, all the members of the Libra Association will be signing on the coin’s white paper, scheduled for release on 18th June 2019. In addition to consortium members, more participation is expected from various companies. Although their roles are not specified for now, companies like Stripe, Booking.com and MercadoLibre are also participating in Facebook’s crypto project.
A few days ago, it was revealed by the Facebook’s head of financial services and payment partnerships for Northern Europe Laura McCracken that Global Coin differed with traditional stablecoins available in the market. Opposed to several other coins, Global Coin will have multiple pegs. Stablecoins are better suited for settling payments than as an investment asset. They gather the decentralized traits of cryptocurrencies with stable fiats and allow customers to utilize blockchain technology.
Like Facebook, Visa has also welcomed blockchain to ease cross-border payments for its clients. Visa has launched a B2B Connect network which is expected to expand over 90 markets by the end of 2019 to help businesses by providing a fast and economical way for transferring funds. Bottomline, FIS and IBM helped Visa to set up a network that used blockchain. Kevin Phalen, SVP, global head of Visa Business Solutions, explained in a statement that they were trying to eliminate the friction that existed in cross-border transactions. In this regard, his exact words were:
By creating a solution that facilitates direct, bank to bank transactions, we are eliminating friction associated with key industry pain points
Facebook and Visa, both possess a huge user base. Facebook alone is said to have an active monthly user base of 1 billion. As their users are all over the globe, the decision of Facebook to launch a multiple peg cryptocurrency becomes understandable. Like the social media platform, Global Coin is devised for people belonging to different countries as all Global Coin users will have several fiat choices to convert the cryptocurrency to and from.
Facebook’s latest has impacted the crypto space to such an extent that apart from waiting for the launch of stablecoin, crypto enthusiasts and influentials are responding with their thoughts. According to the co-founder of Morgan Creek Digital, Anthony Pompliano, a renowned personality in the space, Facebook’s success in managing backers such as Visa and MasterCard is a prospective sign for bitcoin as well. As more people are likely to join the blockchain based Global Coin, surely, it will be a positive move to aid the mass adoption.
Facebook has secured Visa and MasterCard as two of the backers for their new cryptocurrency.
Very positive signs for future adoption of Bitcoin ?
— Pomp ? (@APompliano) June 13, 2019
Facebook started off the project quite secretively, giving birth to several ambiguities and questions. Although the company has openly revealed details about the whitepaper and consortium, theere are questions related to stablecoin that still remain unanswered and will only be dealt with time, after the launch of Global Coin.
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