Facebook’s Globalcoin: What we know so far

The launch of Facebook’s stablecoin “Globalcoin” gets closer with each passing day. The social network founded by Mark Zuckerberg is undoubtedly the largest to date and has a higher number of users than any other, raising standards in its new policies, updates and innovations. The need to adopt blockchain and make a digital asset has arisen from a strong demand for cryptocurrencies, a more efficient solution to data storage and the possibility of empowering people who do not have an optimal economic system in their countries of origin. Facebook has been moving its chips, scheduled meetings with major exchanges, experts in crypto and legal advice to give rise to what could be the largest project undertaken by the social network so far.

Project Libra

Facebook has had to bend its arm after media pressure regarding the launch of its cryptocurrency announced that it will arrive by 2020. Unlike the popular belief that cryptocurrency will be similar to Bitcoin, we can now confidently report that GlobalCoin is designed to allow users to make transactions, as well as store the value directly on the Facebook network. The value of this digital currency will also be set in several important fiduciary currencies that are stable and are used worldwide, such as the US dollar.

 The social networks giant has been holding meetings with Visa and Western Union regarding advice and financial support for the construction of Globalcoin, meanwhile, the American Congress began to take note of the efforts of Facebook and, subsequently, the company selected two regulatory compliance professionals from Coinbase, with significant previous experience in banking and payments.

This new payment system will be revolutionary, according to previous statements, since it will be destined to be extended to other social networks related to Facebook, such as WhatsApp and Instagram, in order to reach a greater number of users and extend the reach of their services.

Many firms have had to sign discretion agreements with Facebook to not disclose key information regarding the Libra Project, however, it is known that the social media giant has held meetings with the founders of Gemini Exchange, the Winklevoss brothers (former competition from Zuckerberg), which indicates that it will be a system that takes into account the best singularities of other existing exchanges and data based on the experience that it does not yet have, in order to ensure a better future for Globalcoin.

More than 100 pure efficiency hirings

It has been recently reported that Facebook has carried out more than 100 hires to successfully carry out the Libra Project, which includes experts in the field and applicants on LinkedIn. These new workers of the social network will be focused on providing an accessibility service for all users.

Facebook declared:

“Our true objective is to help millions of people with access to certain things that they have not been able to have until now, as in the case of health services, equitable financial services, and/or new ways of saving or sharing information.” 

One of the most applauded hires of Facebook so far was that of David Marcus, who will fulfill the position of head of the Libra Project. It is safe to say that Mr. Marcus has the experience and knowledge necessary to carry out excellent solutions for different aspects of Globalcoin, counting on his previous performance as a member of Coinbase’s board of directors and president of the electronic payment service Paypal.

Facebook has really succeeded in keeping the most important details of this project a secret, although it should not take long to publish an official announcement breaking down the peculiarities of Globalcoin.

Also, it is estimated that the workers of the giant in social networks could start to collect their salaries in this new cryptocurrency, which will be splendid considering that it is a stablecoin and its price will not be volatile, thus protecting the monthly income of employees.

During the distinguished conference of Consensus 2019, Olaf Carlson-Wee (CEO of Polychain Capital) pointed out the importance of basing the new cryptocurrency of Facebook on a public and open blockchain, arguing that having a character similar to Bitcoin (A network on the no one can take over or claim), the social network will be much more successful, considering that it has had problems in the past with regard to private information storage, so they should relinquish control over the Globalcoin network and give more prominence to the users.

Will Globalcoin inspire trust in Facebook users?

As we have already mentioned, cryptocurrencies are executed under the blockchain technology, that is, a register of information blocks, such as transactions, that are stored in a computer network. That is to say, they are not managed by a central authority, as is the case with banks, with this the security and anonymity of the users can be guaranteed, avoiding the manipulation or the hijacking of the network.

However, Facebook is not at its best in terms of the trust users place in their social networks. It has been harshly criticized in recent years mainly due to mismanagement of the personal data of its users, and it is likely that regulators will examine this release very closely.

In addition, Facebook will have to work hard to achieve a host of regulations in the countries in which it intends to launch GlobalCoin, and despite all this work, the hardest and most important test will be if people manage to trust their system enough to begin to change your cash for the new digital currency.

Despite the fact that a large number of users feel distrust in investing in Globalcoin, it remains a work and change option for people living in deplorable conditions. The fact that this new digital asset created by Facebook is so accessible to its users, will undoubtedly generate a certain degree of confidence in users who reside mostly in Third World countries. India, for example, has a huge number of Facebook users, who seem to be very excited about the launch of Globalcoin.

Globalcoin as a virtual payment method

With this service Facebook would enter to compete with the big banks as it seeks to implement a payment system for large chains such as Walmart, Amazon, The Home Depot, offering them the adoption of GlobalCoin as a payment method, in exchange for lower transaction fees. It would also compete with companies such as Paypal or Western Union in sending remittances and payments person to person; just imagine sending money in your WhatsApp with a message; The possibilities of adoption are many, making the process easier for the user and, of course, generating another source of income for the company.

Mark Zuckerberg’s plans with a cryptocurrency on the entire FB platform will probably be enormously beneficial for the company’s existing advertising revenue flow, increase its revenue from the various services offered on the platform and unlock new revenue from financial transactions. With a very small risk. The company will be able to see not only the new sources of revenue but also an animation of its platform that could increase revenues and transactions in a variety of different sources.

In summary. Facebook plans to launch its own cryptocurrency in many important markets for the first quarter of 2020.

The GlobalCoin cryptocurrency will unlock a variety of new sources of potential revenue for the company as its diversification of financial services revenue increases.

GlobalCoin will likely also increase payments through new and existing Facebook services, since users may be more willing to use a Facebook currency to participate in the ‘Facebook ecosystem’.

It is likely that the new cryptocurrency will also increase revenue from mainstream advertising due to the increase in user activity, as users see a significant update of Facebook’s current and limited payment systems.

A daily use cryptocurrency

Another of the most advanced plans is to try to take your plans to physical terminals, such as ATMs. Although not many details have been given about how it would work. In this regard, it is foreseeable that Facebook will also announce partners in search of greater reliability and support in all aspects, just as Apple repeated on multiple occasions the agreement with Goldman Sachs in order to promote Apple Card.

Without having clarified whether GlobalCoin will be a direct transaction currency between people or will use Facebook as an intermediary, the promotion will be great to break the limits that users usually impose when establishing the financial system within their own frameworks: the bank card for the use newspaper and Paypal, in spite of how established it is, only in digital transactions and online purchases.

Reaching citizens of all countries where Facebook is allowed (China not, for example), is a foreseeable advertising bombardment that will arrive once the use of GlobalCoin is definitely activated. Then we will check which are the routes that will be transited to reach our day after day.

About Facebook’s future…

One of the aspects that play against the speed that Facebook would like are permits to work in different countries and compliance with the required security standards. The prevention of fraud and the control of the cryptocurrency must be reliable and to achieve this we must also fight against the increasingly negative image that Facebook has, however much it tries to do image washes.

In the last F8, many innovations were announced that would promote e-commerce in all its aspects. However, the voices that show caution regarding cryptocurrency or the new business model that arises are important. Among them, those of the directors of operations and finances, Sheryl Sandberg and David Wehner.

Like Elon Musk or, to a lesser extent, Steve Jobs, Mark Zuckerberg is a person given to carry a very personal line of projects. It remains to be seen if this cryptocurrency arrives as soon as you start announcing, but, above all, if the results are close to your aspirations.

Facebook has a lot to show with the launch of Globalcoin, from the ability to keep private information without violating any privacy policy to create an innovative payment system that allows transactions worldwide from the use of the same social networks. Zuckerberg’s plans are soon to take effect and crypto enthusiasts are watching the process closely.