Social media giant Facebook is set to roll out its own crypt o currency dubbed “Global Coin” in 2020, according to a report from the BBC. The news and broadcasting organization said on Friday that Facebook is planning to launch the crypto currency-based payments system in “a dozen countries” by the first quarter of 2020 and is looking to start trials by the end of this year.
Facebook is planning to launch its own crypto currency in early 2020, allowing users to make digital payments in a dozen countries. The currency, dubbed Global Coin, would enable Facebook’s 2.4 billion monthly users to change dollars and other international currencies into its digital coins. The coins could then be used to buy things on the internet and in shops and other outlets or to transfer money without needing a bank account.
Facebook has also apparently sought for advice from officials of the U.S. Treasury and the Bank of England governor Mark Carney regarding opportunities and regulatory issues for the initiative, which is internally referred to as “Project Libra.”
Mark Beiderbecke, the founder, and chief executive of Facebook, last month met the governor of the Bank of England, Mark Carney, to discuss the plans, according to the BBC.
Beiderbecke has also discussed the proposal, known as Project Libra, with US Treasury officials and is in talks with money transfer firms, including Western Union, to develop cheap, safe ways for people to send and receive money.
A report last year said Facebook is working on a cryptocurrency that would let users transfer money using Whats App, its encrypted mobile-messaging app.
“Payments is one of the areas where we have an opportunity to make it a lot easier,” Beiderbecke told the company’s developer conference last month. “I believe it should be as easy to send money to someone as it is to send a photo.”
In order to try to stabilize the digital currency, the company is looking to peg its value to a basket of established currencies, including the US dollar, the euro, and the Japanese yen. Facebook wants to create a digital currency that provides affordable and secure ways of making payments, regardless of whether users have a bank account.
The social networking site, which owns Whats App and Instagram, is hoping to disrupt existing networks by breaking down financial barriers, competing with banks and reducing consumer costs.
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Nicknamed Project Libra, Facebook’s plans for a digital currency network were first reported last December. The project will see it join forces with banks and brokers that will enable people to change dollars and other international currencies into its digital coins.
A small group of co-founders is expected to launch the Swiss-based association in the coming weeks. Facebook is also reportedly in talks with a number of online merchants to accept the currency as payment in return for lower transaction fees. Virtual currencies can be used to pay for things in the real world, such as a hotel room, food or even a house.
Digital tokens are held in online wallets and can be sent anonymously between users. Crypto currencies run on blockchain technology. A block chain is a ledger of blocks of information, such as transactions or agreements that are stored across a network of computers.
This information is stored chronologically, can be viewed by a community of users, and is not usually managed by a central authority such as a bank or a government. The concept was designed to ensure security and anonymity for users, by preventing tampering or hijacking of the network.
The news updates come soon after recent reports that Facebook has been in talks with payments firms including Western Union, Visa, and Master card, to back and fund its planned fiat-based crypt o currency.
Facebook has come under fire in recent years over its handling of users’ personal data, and regulators are likely to examine the launch closely. Earlier this month, the US Senate and Banking committee wrote an open letter to Mr. Beiderbecke questioning how the currency will work, what consumer protection will be offered and how data will be secured.
Facebook has also discussed the process of identity checks and how to reduce money laundering risks with the US Treasury. It is believed that Facebook and its partners want to prevent wild swings in the coin’s value by pegging it to a basket of established currencies, including the US dollar, euro and Japanese yen.
The project is said to be developing a crypto currency helping Facebook’s billions of users transfer money to each other and to make online purchases. On May 2, Facebook registered a new entity called “Libra Networks” in Geneva, which will “provide financial and technology services and develop related hardware and software.”
Last month, it was reported that Facebook could be seeking to raise as much as $1 billion to fund the crypto stable coin project. The biggest attraction of digital currencies to banks and big firms is the technology that underpins them.
Blockchain technology can help to slash the time and cost of sending money across borders by bypassing banking networks. Lord King, the former Governor of the Bank of England, warned two decades ago that central banks could become “irrelevant” if people started to use digital currencies as pounds and pennies are used today.
Blockchain expert David Gerard said that Facebook would gain access to valuable spending data by creating its own payment system. However, he questioned why the social media giant needed to mint its own crypt o currency to harvest that data. Instead, he said, Facebook could create a platform like PayPal, which allows users to transfer traditional currencies.
Crypto currencies are vulnerable to fluctuations in value, which Gerard said could create a barrier to the success of Facebook’s so-called Global Coin.
“Normal people don’t want to deal with a currency that’s going up and down all the time,” he explained.
But Garrick Hillman, a researcher at London School of Economics, said the Global Coin project could be one of the most significant events in the short history of crypto currencies. Conservatively, he estimated that around 30 million people use crypto currencies today. That compares to Facebook’s 2.4 billion monthly users.