Recent developments indicate that major tech giants like Apple and Facebook are venturing into the financial services scene for the first time.
While Apple is planning to roll out its credit card later this year, Facebook will reportedly be launching their own cryptocurrency in 2020.
Known as GlobalCoin, Facebook’s cryptocurrency will be available in up to 20 countries by 2020 and will eventually be rolled out to other regions in the following months.
According to reports from BBC News, Facebook hopes to start beta testing before the end of 2019.
Meetings with Regulatory Leaders
Facebook CEO Mark Zuckerberg met with Mark Carney, the governor of the Bank of England, to discuss the possibility of a Facebook cryptocurrency and the risks involved with entering this new market.
The social media giant is also in talks with the U.S. Department of the Treasury on the necessary regulations Facebook will need to satisfy if they are going to issue digital coins to be used to purchase items both on their own platform and possibly from other vendors.
The U.S. Senate Banking Committee also recently penned a letter [PDF] to Zuckerberg asking for specific details about the cryptocurrency project.
Facebook Looks into Partnering with Exchanges
In addition to working to develop their own cryptocurrency, Facebook has been in discussions with exchanges Coinbase and Gemini about allowing the trading and storage of GlobalCoin on their platforms.
Gemini is run by twin brothers Tyler and Cameron Winklevoss, who famously sued Zuckerberg in 2004, claiming he stole their idea when he founded Facebook. The dispute was settled for $65 million in 2008.
Streamlined Cryptocurrency Era Begins
A major asset of Bitcoin is the inherent anonymity and security built into the framework of the cryptocurrency and others like it. Bitcoin detractors cite the high transaction fees, slow account withdrawal and deposit rates, and the massive energy expenditures involved with mining the cryptocurrency.
Facebook’s GlobalCoin is claimed to be more streamlined than Bitcoin, which may give it an edge, but it remains to be seen how the market will react to a cryptocurrency coming from a company that often comes under fire for not protecting their users’ privacy.
In addition to working with cryptocurrency exchanges, Facebook has also been in talks with major financial transaction providers including Visa, MasterCard and Western Union, according to a report from the Wall Street Journal in early-May. These discussions appear to be surrounding the funding of Facebook’s cryptocurrency project.
With top Wall Street investment firms following the wave of crypto enthusiasm, Facebook may easily be able to attract early backers for its new venture.
Facebook’s GlobalCoin and the Changing Face of Money
Like most other cryptocurrencies, Facebook’s GlobalCoin should help users avoid transfer fees imposed by financial institutions for exchanging money domestically and across borders.
This will make the currency useful for people with friends and family overseas, or who conduct business with foreign entities.
Facebook has over two billion users and owns WhatsApp and Instagram, two highly successful social platforms. Going by what we know about the project so far, the company appears to have high expectations that its existing users on Facebook, WhatsApp and Instagram will opt for GlobalCoin to pay for their online purchases and to send money to one another without the involvement of traditional banks.
Facebook’s History with Cryptocurrency
In January of 2018, Facebook announced that they would no longer allow ads that promoted cryptocurrencies in any way. This included banning advertisements for ICOs (initial coin offerings) and those that mentioned Bitcoin. The company reasoned that these promotions often offered deceptive services and products that misled its users.
However, Facebook chose to lift the ban on cryptocurrency advertisements just six months later. Around this time is also when they began discussing the possibility of launching their own cryptocurrency.