According to a new report, Mastercard and VISA invest in Facebook Crypto GlobalCoin. Uber has also joined these big names to support Mark Zuckerberg’s crypto endeavor.
June 14, 2019, | AtoZ Markets – Social media giant Facebook’s yet-to-launch cryptocurrency appears to have attracted three major payments companies as backers, as was reported first by The Wall Street Journal.
Visa, Mastercard and PayPal are set to be backers of Facebook crypto GlobalCoin along with a number of other companies, including Uber. Each will invest approximately $10 million into a foundation that will govern the coin, the Journal said citing anonymous sources. That money will be used to create the backing for the coin, which will be pegged to a basket of fiat currencies.
Neither the governing body called the Libra Association nor Facebook will directly control the coin, according to the Journal. Sources also told the Journal that some members don’t fully understand how the coin will work or their role in the project. Some members are also using the coin to widen their reach globally, with the Journal reporting Financial-technology firm Stripe Inc., travel-reservation site Booking.com and Argentina-based e-commerce site MercadoLibre Inc. signing on as well.
Facebook GlobalCoin launch will boost crypto adoption
As interest in the Mastercard Facebook Crypto rises, a study from LendEDU has reported that a digital coin from the social media giant could lure new users to the crypto space, particularly due to its Marketplace feature, with which Facebook users can buy and sell items locally. Some have ventured that its launch will be the largest catalyst for Bitcoin adoption — and thus price — in this industry’s history.
Blockchain Capital’s Spencer Bogart shared his thoughts on the matter in an extensive Twitter thread. Put short and sweet, the stablecoin is “among the most bullish external tailwinds for Bitcoin in 2019/2020”. Bogart adds that the only bigger catalyst for BTC growth will be quantitative easing (an inflationary fiscal policy), which he calls a “reinvigorated push among central banks for easy-money globally”.
While explaining the benefits of Facebook’s Globalcoin, Bogart said that the corporate cryptocurrency “eases the biggest friction in acquiring digital assets”, in other words, it makes getting fiat into this ecosystem extremely easily. Once fiat is allocated towards Globalcoin, the investor assumes that value can flow easily between the Facebook ecosystem and something like, let’s say, Bitcoin or Ethereum. He added:
“Facebook making a concerted push for digital asset adoption and creating a circular economy is great because it solves that friction point. Once people are holding/earning a digital asset, it’s relatively trivial to go from, for example, USDC to BTC.”
The cryptocurrency world could soon learn more details about the digital asset. The Information reported earlier this month that Facebook would release the white paper for its coin, outlining its specific details, later this month. Ahead of its whitepaper, Facebook posted additional blockchain jobs this week as well, with the total number of openings reaching 28.
How will Facebook Crypto GlobalCoin be used?
As per a BBC report last month, the company has been rapidly moving forward with its plans, reportedly hoping to launch its Facebook crypto GlobalCoin by Q1 of 2020. The report also added that tests are slated for later this year before launching in some countries. Some speculate the token could be used for payments in messaging apps.
However, Facebook has been tight-lipped about what exactly GlobalCoin will be used for, though the BBC suggested that Facebook may look to retailers, allowing its users to purchase discounted goods using the cryptocurrency. The cryptocurrency would be used to transfer value directly from Facebook to the retailer, cutting out credit card companies in the middle, which BBC suggests would help the retailers’ profits.
On the regulation front, the Commodity Futures Trading Commission (CFTC) was in early talks with Facebook about its coming stablecoin. Though no application has yet been submitted to the CFTC, according to commissioner Christopher Giancarlo, the body is trying to discern whether the crypto would fall under its jurisdiction.
Facebook Crypto GlobalCoin not without flaws
A majority of people still see issues with Globalcoin. Some are wondered why would VISA invest in Facebook Crypto, a company with notable issues like privacy and governmental oversight? Just the other day, Mark Zuckerberg was thrown into yet another scandal involving the privacy of his creation’s users.
Emails published by the Journal on Wednesday revealed that Zuckerberg has been involved in “potentially problematic privacy practices”. More specifically, the Silicon Valley all-star mentioned issues with privacy in emails, evidently accentuating that he has been following these situations closely.
The thing is, for the longest, Facebook has been slow to act in terms of stemming privacy issues. And some fear that this seemingly negligence may continue with Globalcoin.
Think we missed something? Let us know in the comments section below.