The most anticipated digital coin by Facebook is set to launch in 2020. Already Mark Zuckerberg has met with the Bank of England governor, Mark Carney, to discuss the decision. Once launched, the coin will make it possible to make digital payments across several countries without having a bank account.
Dubbed the GlobalCoin, its visibility will be supported by the monthly 2.4billion Facebook global users. The platform will enable users to change fiat currencies into digital coins of their choice. With these coins, users will be able to shop online.
New Dawn in Money Transfer
The Facebook chief executive and funder, Mark Zuckerberg also had a discussion on the proposal dubbed Project Libra with the US Treasury officials. He is also said to be in talks with Western Union, a money transfer outfit in a bid to come up with an affordable and secure way to send receive funds.
Last year, it was reported that Facebook was looking at creating a digital coin that can enable its users to transfer money using the messaging app, WhatsApp. During the company’s developer conference in April, Zuckerberg is quoted as saying:
“Payment is one of the areas where we have an opportunity to make it a lot easier,” Zuckerberg told the company’s developer conference last month. “I believe it should be as easy to send money to someone as it is to send a photo.”
Facebook Value Addition in the Financial Sector
The company is exploring ways of pegging value to stable currencies including the USD, YEN and Euro. This will go a long way in rewarding Facebook users for interacting with the platform online shopping and ad viewing.
Observers are however not comfortable with the social network due to regulatory and data privacy issues. These concerns might slow down coin adoption and eventual usability. According to Rebecca Harding, chief executive of banking trade data analytics firm Coriolis Technologies:
“Facebook is not regulated in the same way as banks are, and the cryptocurrency industry is, by definition almost, unregulated.”
“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.”
The data leakage of 87million Facebook account holders is a good example where the data was used by Cambridge Analytica for targeted advertising during the US presidential election in 2016 where Donald Trump emerged the winner.
The US Senate committee on banking early this month wrote a letter to Zuckerberg to explain how the ‘GlobalCoin” will work, how he will make sure users are going to be protected and how their data will be secured.
Facebook Ground Work Already Done
In April this year, it was reported that Facebook was looking for funding estimated to be $1billion for the project. For this reason, it has had talk with global payment giants; MasterCard and Visa.
Speculations have been high that Facebook is moving to the financial sector. This became clear after the social network hired David Marcus, a former PayPal president in 2014 to run it’s the messaging App. What more, Marcus is also a board member at Coinbase, a crypto exchange.
Facebook appears to be following the footsteps of JPMorgan who became the first high profile American bank to jump into crypto to expand the horizons for its customers in payment settlements.