Facebook is always looking to expand and develop. Not so long ago, you couldn’t play any casino games on the social media platform. Today, it’s the world’s best source of social gambling. If you’re not playing online Keno and other games for real money, Facebook offers a great selection of no-deposit titles. Now the company is also said to be about to launch its own cryptocurrency, rumoured to be called GlobalCoin.
Details Are Still Hazy
At the annual F8 developer conference in April 2019, Chairman and CEO Mark Zuckerberg said he believed sending money to someone should be as simple as sending a photograph. However, he wasn’t commenting directly on virtual currency at the time. Instead, he was articulating a pivot to privacy for the social network, where private conversations are much more common than public news and messages.
The new virtual coin will presumably be sent on private messages, as Zuckerberg’s enigmatic comment suggests. Facebook announced in January that it wanted to unify its Messenger, Instagram and WhatsApp platforms, which would make person-to-person transfers much easier. A month earlier, in December 2018, the first reports of the planned cryptocurrency network – which has been nicknamed Project Libra – came to light.
While the digital payment service is now confirmed, there are still a lot of details that remain unclear. We do know that Facebook will join with brokers and banks to allow people to change various fiat currencies into GlobalCoin. These will be used to make purchases at various online merchants, who are in talks with the company now.
Plans are expected to be outlined further in the near future, and Zuckerberg has already met with Bank of England governor Mark Carney to discuss the risks and opportunities associated with cryptocurrencies. The blockchain technology that allows decentralisation in all virtual money networks, and ostensibly prevents tampering and fraud, will be used.
Facebook has also sought advice from the United States Treasury, and is believed to intend pegging GlobalCoin to various established currencies. By linking it to the Euro, the US Dollar and the Japanese Yen, Facebook hopes to avoid the wild value swings seen with Bitcoin and similar systems. Zuckerberg has even held talks with the Winklevoss twins, who infamously accused him of stealing the idea for the social network site in the first place. The twins subsequently founded one of the only two crypto exchanges currently pegged to the United States Dollar, so they are good people to ask for advice.
Concerns Over GlobalCoin
Other factors about the digital currency are also unknown, and some of them are worrying industry insiders. Security is always a key issue, and given Facebook’s recent involvement in Cambridge Analytica and other personal data scandals, it is especially relevant here. Over and above protecting funds, will consumers’ privacy and information be sold or handled improperly? The United States Senate and Banking Committee wrote an open letter to Zuckerberg earlier in May, posing these questions. Cryptocurrency regulation is, in general, a grey area, and social media platforms are certainly not monitored and controlled the way banks are.
The value swings associated with digital coins are another potential headache, even with the efforts to peg GlobalCoin to flat currencies and lessen the fluctuations. The countries that Facebook wants to launch their system in also all have their own rules and regulations. For example India, one of its prime target markets, recently clamped down on virtual payment networks. Navigating all the different requirements, while still delivering a consistent, user-friendly service, could prove very difficult.
Perhaps the most pressing worry is whether or not customers will trust GlobalCoin, and use it regularly. With the company’s recent data faux pas and the general public misgivings about virtual coins, this issue could really go either way.
Motivation for GlobalCoin
There are many reasons for Zuckerberg’s corporation to launch its own digital currency. Firstly, it wants to make it possible for everyone to make secure, affordable payments, whether or not they have a bank account. The data that could be harvested could also be used in legitimate ways. Also, if private conversations do overtake public messages on the platform, advertising revenue will be affected. By controlling this new type of funding, the platform could establish various monetisable experiences. For example, they are considering paying out fractions of coin units to users who shop online, view advertisements or interact with content in other ways.
So, will it work? The jury is still out on that question – but if GlobalCoin is relatively stable against fluctuations and people trust it enough to use it regularly, it just might. Facebook hopes to launch the payment network in its initial dozen countries, including the UK and the USA, by the end of 2020’s first quarter. Do we want the network to be further entrenched in our daily lives than it is now? That is another question entirely.