Media is flooded with news about Facebook’s Crypto Coin launch which has been on the way for the last six months. The most recent coverage includes the list of well-known companies supporting the development and implementation of the new crypto coin. Namely, Visa, Mastercard, PayPal and Uber are all on board with reportedly approximately $10 million investment each, as well as Stripe, Booking.com and MercadoLibre – to name a few. What we know today is that the first four mentioned companies form a part of the governing consortium, while the specific role of the other companies is not completely clear. MercadoLibre is a South American e-commerce platform operating in 19 countries and was mentioned in an article on Cointelegraph as a platform where Facebook’s cryptocurrency will be integrated into the e-platform as a form of payment.
Advantages of a Company Behind Crypto Coin
The main advantage of Facebook as a company behind this project is the fact it has 2.375 billion monthly active users worldwide. This is the leverage that can get them to the position of a major competitor not only banks but some gigantic companies such as Mastercard Inc., Visa Inc., PayPal Inc.
Following this path, financial experts believe that an open cryptocurrency system has better chances of encouraging commerce over Facebook, comparing to a closed crypto system. The thing is that in an open system of this kind, it is easier to exchange to/from fiat currency, making it more accessible to consumers.
Purpose and Usage of the Crypto Coin
GlobalCoin is developed to operate within the “messaging infrastructure”, namely: WhatsApp, Instagram and Facebook Messenger. No specific description has been revealed yet. However, many analysts have pondered on the subject and predicted that the new GlobalCoin may be used in such a way to allow the users to buy at discounts using the crypto, while the GlobalCoin would be used to transfer the value from FB directly to the retailer, eliminating the third party: credit card companies, for example.
The other, also frequently commented possible use of the new crypto could be the practice of giving it away as a reward to users on FB clicking on adds, for example.
Challenges of Developing Crypto Coin
The launch of the project will take place on June 18th, when Facebook will unveil the details regarding the “Libra Association” – the company based in Switzerland which should govern the entire process of exchanging traditional fiat currencies to GlobalCoin.
Furthermore, the BBC’s blockchain expert David Gerard, reportedly claimed that the chances are Facebook would aim at making GlobalCoin a stable coin, because people would hesitate to handle coins that fluctuate often. Stablecoins are linking to the values of fiat currencies, and as per the report from Financial Times at the beginning of this month, GlobalCoin is likely to be pegged to the U.S. dollar, although the details of its issuing, storing and transferring still remain unclear.
Any expectations from your side on Facebook’s new endeavor?