May 24, 2019, | AtoZ Markets - Facebook will launch GlobalCoin in 2020. The social media giant wants to start testing its digital currency by the end of this year.
Facebook will launch GlobalCoin in 2020 in collaboration with global banks
According to the latest reports, the social media giant is planning to set up a digital payments system in a dozen countries by the first quarter of 2020. The company as already spoken with a number of financial experts including Bank of England governor Mark Carney, and money transfer institutions, like Western Union.
Last month Faceboook CEO Mark Zuckerberg discussed with Mark Carney the opportunities and risks involved in launching a crypto-currency. The social media giant also contacted US Treasury officials on operational and regulatory issues.
Facebook GlobalCoin to be used in Libra Networks
Recently, Atoz Marketz has covered an article related to the new Facebook project -a fintech company under the name Libra Networks, which was registered in Switzerland Geneva. According to the company’s description in the commercial register, the company with Facebook Global Holdings as a stakeholder would focus on the blockchain, payments, data analytics, and investing.
The aforementioned project allegedly will join forces with banks and brokers that will enable people to change dollars and other international currencies into its digital coins.
According to the different media resources, Facebook GlobalCoin will form the basis of the new payment system in ‘Libra’.
In addition, co-founders of the new Facebook project are expected to launch the Swiss-based association in the coming weeks.
The social media giant is also reportedly in talks with a number of online merchants. The company offers them to accept the currency as payment in return for lower transaction fees.
Facebook on the US regulators radar
The social media giant continued attracting attention from the US governmental authorities. It worth to mention, that in May 2019 the US Senate Banking Committee already contacted Facebook Inc via an open letter, demanding the company to provide information about the aforementioned Libra project.
Also, the community still remembers the recent scandal related to the social media giant and it’s users data thievery. However, it seems that the company has already taken certain measures to regain its coin’s users' trust.
Facebook allegedly has discussed the process of identity checks and how to reduce money laundering risks with the US Treasury. Moreover, to prevent its GlobalCoin value swings, the Facebook coin’s value is expected to be backed by a basket of established currencies, including the US dollar, euro, and Japanese yen.
There is some skepticism about Facebook GlobalCoin launch
Despite the generally positive attitude towards the new Facebook initiative, some blockchain experts and financial market analysts are concerned about the launch of the new crypto.
Blockchain expert David Gerard questioned why Facebook needed to create its own payment system with crypto-currency to gain access to its users’ valuable spending data.
Gerard mentioned, that instead, the company could create a platform like PayPal, which allows users to transfer traditional currencies. He also stated that cryptocurrency fluctuations in value could create a barrier to the success of Facebook's GlobalCoin.
However, Garrick Hileman, a researcher at the London School of Economics called GlobalCoin project could one of the most significant events in the short history of crypto. He estimated that around 30 million people use crypto-currencies today, which compares to Facebook's 2.4 billion monthly users.
Facebook GlobalCoin launch in 2020 remains promising
Facebook's quest for launching its own crypto might be challenging. First of all, the company will have to deal with the myriad of regulations in the countries it wants to launch in. For example, India, a possible target for Facebook, remains strict from a regulatory perspective on digital currencies.
The biggest concern, however, which might bother the Facebook team is whether users will trust the social networking giant enough to start changing their cash for the digital coin.
According to the latest reports, Facebook is in the initial phase of engaging with governments, central banks, and regulators. It is worth to mention, that in March 2019 Barclays Bank analyst predicted that Facebook coin would generate up to $19 billion in revenue for the firm by 2021.
The company insiders admit that launching any cryptocurrency network by the start of next year remains promising and ambitious.