Tech giant Facebook has announced that it's planning to launch its own cryptocurrency named GlobalCoin in 2020, in an effort to create a virtual currency for online shopping.Facebook has reportedly been
in talks with the Bank of England and major payment providers Visa and Mastercard to discuss plans to launch its new "GlobalCoin" cryptocurrency in 2020. The company
is reportedly looking for $1bn (about £790m) to get the coin off the ground, and plans to integrate it into Facebook and WhatsApp as a payment solution.
Several companies have attempted to create global virtual currencies over the years with the goal of replacing cash online and making international purchases easier, but they tend to suffer from low adoption rates among users and retailers. This may be where Facebook's massive online presence and financial backing could come in handy, both in convincing users to buy into the currency and in getting retailers to accept it.
Facebook is reportedly aiming to peg the new currency against a basket of real world currencies in order to keep the price stable, and will act as an exchange to let users turn their real world cash into GlobalCoin. The company tried something similar previously with its virtual currency Facebook Credits, which could only be spent on a limited number of things and was discontinued in 2013.
The new currency is a cryptocurrency rather than a token issued by Facebook itself, but that distinction depends heavily on how the currency is implemented. Cryptocurrencies like Bitcoin rely on an open public blockchain ledger that is maintained by millions of users running mining software around the world, which protects the system from tampering or being controlled by any one corporation or individual. We don't yet know exactly how GlobalCoin's system will work.
Other issues that may hinder the currency's creation include Facebook's poor track record with user privacy and the fact that cryptocurrencies aren't considered legal tender or regulated in most countries. The move could also be seen as Facebook attempting to disrupt the banking sector and operate a global bank without the heavy regulation that normally goes with it, which may cause issues in some countries.
Source: Guardian, BBC News
About the author
Brendan is a Sync NI writer with a special interest in the gaming sector, programming, emerging technology, and physics. To connect with Brendan, feel free to send him an email or follow him on Twitter.
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