Facebook reportedly set to launch its own ‘GlobalCoin’ cryptocurrency in 2020 that would let users send money to each other and make purchases online and in stores
- Facebook reportedly met with regulators to debut its cryptocurrency in 2020
- Called ‘GlobalCoin,’ will launch in several countries as a secure payment system
- Users could send others money and buy things online as well as in real stores
Facebook has been in contact with US and British financial regulators with a view to launching its own cryptocurrency next year, the BBC reported on Friday.
‘GlobalCoin’ would work with a new digital payments system in about a dozen countries, starting in the first quarter of 2020, the BBC said.
Previous reports have said Facebook is taking a serious look at blockchain technology under its ‘Project Libra’, in part to tackle doubts about privacy among its many users following a series of scandals.
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Facebook has been in contact with US and British financial regulators with a view to launching its own cryptocurrency next year. The firm’s cryptocurrency would be called ‘GlobalCoin’
But the targeted date appears new. The BBC said Facebook had already spoken to Bank of England governor Mark Carney and to officials at the US Treasury, and was expected to flesh out its plans this northern hemisphere summer.
Speculation began building that Facebook would pursue some kind of financial services after it scooped up former PayPal president David Marcus to lead its blockchain division.
Facebook’s currency would be ‘stablecoin’, a digital unit pegged to the dollar in contrast to more anarchic means of virtual payment such as bitcoin, according to earlier reporting by Bloomberg and the Wall Street Journal among others.
It would allow users to not only send money to each other, but also pay for things on Facebook, WhatsApp and Instagram, across the internet and even in stores where it’s an accepted form of payment.
With more than two billion users across its platforms, which include WhatsApp and Instagram, Facebook could have the clout to take a cryptocurrency mainstream and emulate the likes of WeChat in China, where the US site is banned.
WeChat allows its users to chat, shop and play games without leaving its platform, generating more revenue by offering a one-stop portal.
The social media giant is also said to have held talks with Jump and DRW, two of the most well-known high-frequency trading firms, about establishing a trading market for its cryptocurrency, according to the Financial Times.
Facebook is expected to launch a ‘stablecoin,’ which is a type of digital currency that’s typically tied to the U.S. dollar. It generally has less volatility than others like bitcoin (pictured)
Facebook has even met with cryptocurrency exchanges including Coinbase and Gemini, which is run by Cameron and Tyler Winklevoss, who went to Harvard with Facebook CEO Mark Zuckerberg and ultimately sued the company for stealing their idea for a social network.
Zuckerberg has said that adding e-commerce is the logical evolution of the company’s advertising-based business model.
But such a step is likely to invite more intense regulatory scrutiny at a time when Facebook is already under a cloud for abuses of privacy and the spread of fake news.
Facebook said it had disabled 2.19 billion fake accounts in the first quarter of this year, nearly double the number of the three months prior.
But Zuckerberg on Thursday rejected the idea of breaking up the social media giant, saying that would hamper the fight against deceit and harmful online content.
WHAT ARE CRYPTOCURRENCIES?
A cryptocurrency is a digital currency that can be used for transactions online.
It is the internet’s version of money – unique pieces of digital property that can be transferred from one person to another.
All crytocurrencies use ‘blockchain’ and one can only be made and shared using specific agreed-upon rules. For each cryptocurrency the rules are slightly different.
Bitcoins are lines of computer code that are digitally signed each time they travel from one owner to the next. Physical coin used as an illustration
People can buy bitcoins through exchanges such as Coinbase and Bitfinex.
Bitcoin was the first cryptocurrency, created eight years ago.
Other currencies such as Litecoin and Dogecoin do the same thing but have slightly different levels of inflation and rules surrounding transactions.
Currently around 270,000 transactions are taking place every 24 hours.
These currencies don’t exist as physical or digital objects. They are just a collective agreement with other people on the network that your currency was legitimately ‘mined’.
Blockchain is the record of changes in ownership of in a currency which is broadcast through the network and maintained by computers around the world.
The network works by harnessing individuals’ greed for the collective good.
A network of tech-savvy users called miners keep the system honest by pouring their computing power into a blockchain, a global running tally of every bitcoin transaction.
As long as miners keep the blockchain secure, counterfeiting shouldn’t be an issue.
However, because cryptocurrencies allow people to trade money without a third party getting involved, they have become popular with libertarians as well as technophiles, speculators — and criminals.
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