Facebook has secured the backing of some really big companies including Visa, Mastercard, PayPal, and Uber for its cryptocurrency project codenamed Libra (also known as GlobalCoin), as per a WSJ report shared yesterday.
Each of these companies will be investing $10 million as part of a governing consortium for the cryptocurrency independent of Facebook. According to WSJ, as a part of the governing body, these companies will be able to monitor Facebook’s payment ambitions. They will also benefit from the popularity of the currency if it takes off with Facebook’s 2.4 million monthly active users.
Despite Facebook being extremely discreet about its cryptocurrency project, many rumors have been floating about this project. The only official statement came from Laura McCracken, Facebook’s Head of Financial Services & Payment Partnerships for Northern Europe. She, in an interview with the German finance magazine Wirtschaftswoche, disclosed that the project’s white paper will be unveiled on June 18th. Other reports by the media suggest that Facebook is targeting 2020 for launching its cryptocurrency.
GlobalCoin is going to be a “stablecoin”, which means it will have less price volatility as compared to other cryptocurrencies such as Ethereum and BitCoin. To provide price stability, it will be pegged to a basket of international government-issued currencies, including the U.S. dollar, euro, and Japanese yen. Facebook has spoken with various financial institutions to create a $1 billion basket of multiple international fiat currencies that will serve as a collateral to stabilize the price of the coin. “The value of Facebook Coin will be secured with a basket of fiat currencies,” McCracken told the publication.
After its launch, you will be able to use GlobalCoin to make payments via Facebook’s messaging products like Messenger and WhatsApp with zero processing fees. Facebook is in talks with merchants to accept its cryptocurrency as payment and may offer sign-up bonuses. The tech giant is also reportedly looking into developing ATM-like physical terminals for people to convert their money into its cryptocurrency.
What do people think about the GlobalCoin cryptocurrency?
Despite a few benefits like decentralized governance, less volatility, no interchange fees many users are skeptical about this cryptocurrency, given Facebook’s reputation.
Here’s what a user said in a Reddit thread, “Facebook tried and failed with credits a while back. A Facebook coin would have some use cases (sending money across borders for example), but in a day-to-day sense, having to buy credits to use isn’t addressing a problem for many people. There’s also going to be some people who have no desire to share what they’re purchasing/doing with Facebook, especially if there isn’t any significant benefit in doing so.”
Here’s what some Twitter users think about Facebook’s GlobalCoin:
Can't wait for a cryptocurrency with the ethics of Uber, the censorship resistance of Paypal, and the centralization of Visa, all tied together under the proven privacy of Facebook. https://t.co/C4FymDjtFw
— Sarah Jamie Lewis (@SarahJamieLewis) June 14, 2019
I'm more than happy about #facebook knowing all of my financial transactions on top of my personal details and conversations with my friends.
While we're at it, here's my soul, my unborn children and some never before seen photos of me in full bondage gear.#GlobalCoin
— Tim Copeland (@Timccopeland) June 8, 2019
However, some users are also supportive of this move. “It is a good idea though because Facebook is now going to start competing with Amazon in e-commerce. Companies aren’t going to just buy ads on Facebook, now they’re going to directly list their items for sale on the site and consumers can be able to buy those items without ever leaving Facebook. Genius idea. They might give Amazon a run for their money,” another user commented on Reddit.