Facebook to launch their cryptocurrency called GlobalCoin by early 2020 to allow easy transfer of money between users in a dozen countries around the world, reported BBC. The currency is expected to allow users of Facebook products to transfer money and make payments for products online without a need of owning a bank account, The Verge reports.
Bloomberg reported on December 20, 2018, that Facebook was developing a Stablecoin for users of its messaging services including WhatsApp, Facebook Messenger, and –maybe –Instagram. The coin was announced to be launched in the first quarter of 2020, although testing begins by the end of this year.
Facebook founder and Chief executive, Mark Zuckerberg has discussed with the US Treasury officials about the “Project Libra,” which is the title given to the current ongoing project. He [Zuckerberg] is also discussing this move with money transfer firms, including Western Union, MasterCard, and Visa, to help back and fund this 1 billion dollars project.
At the company’s developer conference last month, the founder said that “Payments is one of the areas where we have an opportunity to make it a lot easier.” He went on to emphasize his belief in the “Project Libra” by saying that he “believe it should be as easy to send money to someone as it is to send a photo.” The Guardian reports.
In pursuit of this project, Zuckerberg has been reported to have met with the governor of the Bank of England last month to discuss this decision; according to BBC. Also, he [Zuckerberg] has met with his biggest legal rivals, Cameron and Tyler Winklevoss, the founders of Gemini Exchanges, a standing blockchain company seeking to prepare a third-party regulated platform for storage of the coin by users; according to Coindesk.
What Experts are saying
This ambition was first rumoured last year after Facebook hired David Marcus, the president of PayPal between the years of 2012 and 2014 and an ex-board member of the blockchain company, Coinbase. Marcus runs the messaging app, Messenger and is the head of the company’s new blockchain division; the Verge reported. Experts reveal that irrespective of the blockchain features tagged on the GlobalCoin, it would be more like the traditional payment platform, PayPal making it convenient for users to send and receive money with ease; Forbes reported. Rebecca Harding, chief executive of Coriolis Technologies, commented that “Facebook is not regulated in the same way as banks are, and the cryptocurrency industry is, by definition almost, unregulated.” She went on to talk briefly about the major challenges that Facebook might face in their
“Project Libra” saying, “In the UK, for example, there are no formal laws that govern this market because cryptocurrencies are not legal tender. Facebook has also had issues with protecting user data in the past few years, and this may well be an issue for it as it tries to provide guarantees to users that their financial information is safe.”
Reports have it that although this move looks promising to the company and many Facebook users, their recent record of repeated scandals concerning their privacy security would pose a significant challenge in people trusting them with financial information. It emerged from an investigation last year that the data of up to 87 million Facebook users had been used improperly by Cambridge Analytica to target ads for Donald Trump in the 2016 US presidential election.
According to Forbes, “governments will never allow these sorts of centralized, controlled offerings to be used for illegal activity. Because of this reality, it should be obvious that stablecoins are effectively ticking time bombs in terms of when the regulatory hammer will come crashing down.” But if this does not occur, it would be evident that stablecoins like Facebook’s GlobalCoin are not more significant than PayPal and the likes.