[ad_1]
Facebook is currently finalizing the launch of its own cryptocurrency next year.
It is planned to implement a digital payment system in a dozen countries by the first quarter of 2020.
The social media giant wants to start testing its cryptocurrency, internally called GlobalCoin, by the end of the year.
Facebook is expected to present its plans in more detail this summer and has already spoken to the governor of the Bank of England, Mark Carney.
Last month, the founder, Mark Zuckerberg, met with Mr. Carney to discuss the opportunities and risks badociated with launching a crypto-currency.
Facebook has also sought advice from US Treasury officials on operational and regulatory issues.
The company is also in talks with money transfer companies, including Western Union, which is looking for faster and cheaper ways for people without a bank account to send and receive money. money.
How will Facebook's crypto-currency work?
Facebook wants to create a digital currency offering affordable and secure means of payment, whether users have a bank account or not.
The social networking site, which owns WhatsApp and Instagram, hopes to disrupt existing networks by removing financial barriers, competing with banks and reducing costs for consumers.
Nicknamed Project Libra, Facebook's plans for a digital currency network were announced for the first time last December.
The project will see that it will partner with banks and brokers to allow people to convert dollars and other international currencies into digital coins.
A small group of co-founders is expected to launch the badociation based in Switzerland in the coming weeks.
Facebook would also be in talks with a number of online merchants to accept the currency as payment in return for lower transaction fees.
What's a crypto-currency?
Virtual currencies can be used to pay for real world items, such as a hotel room, food or even a home.
Digital tokens are stored in online portfolios and can be sent anonymously between users.
Crypto-currencies use blockchain technology. A blockchain is a registry of information blocks, such as transactions or chords, stored on a network of computers.
This information is stored chronologically, can be viewed by a community of users and is generally not managed by a central authority such as a bank or government.
The concept was designed to ensure the security and anonymity of users by preventing any attempt to hack or misuse the network.
What are the concerns?
Facebook has been trapped in recent years for the processing of users' personal data, and regulators are likely to consider the launch more closely.
Earlier this month, the US Senate and Banking Committee sent an open letter to Mr. Zuckerberg asking how the currency would work, what consumer protection would be offered and how the data would be secured.
Facebook also discussed the identity control process and how to reduce money laundering risks with the US Treasury.
It is believed that Facebook and its partners want to avoid sharp fluctuations in the value of the coin by linking it to a basket of established currencies, including the US dollar, the euro and the Japanese yen.
Will it be the second time of luck?
This is not the first time that Facebook uses digital currency. Ten years ago he created Facebook Credits, a virtual currency allowing users to buy items in apps on the social networking site.
However, Facebook ended the project less than two years after its failure.
The company will also have to comply with a multitude of regulations in the countries where it wants to go. India, supposedly Facebook's target, has recently repressed the digital currencies.
However, the biggest problem will probably be whether people will trust the social networking giant enough to start changing their money for the digital piece.
Facebook is in the initial phase of collaboration with governments, central banks and regulators, and insiders admit that launching a cryptocurrency network by the beginning of next year is ambitious.
Facebook, Western Union and Bank of England declined to comment.
Will the Facebook cryptocurrency work?
The main attraction of digital currencies for banks and large corporations is the technology behind them.
Blockchain technology can help reduce the time and costs of transferring money across borders by bypbading banking networks.
Lord King, former Governor of the Bank of England, warned two decades ago that central banks could lose their "relevance" if people started using digital currency the moment they are used today. 39; hui.
Channel expert David Gerard said Facebook would have access to valuable spending data by creating its own payment system.
However, he wondered why the social media giant had to hit his own cryptocurrency to exploit this data. Instead, he added, Facebook could create a platform such as PayPal, which allows users to transfer traditional currency.
Crypto-currencies are vulnerable to fluctuations in value, which, according to Gerard, could hinder the success of Facebook's so-called GlobalCoin.
"Normal people do not want to deal with a currency that fluctuates all the time," he said.
But Garrick Hileman, a researcher at the London School of Economics, said the GlobalCoin project could be one of the most significant events in the brief history of cryptocurrency.
Conservatively, he estimated that about 30 million people are using cryptocurrencies today. This compares to the 2.4 billion Facebook monthly users.
Source link
