Facebook will be launching its own cryptocurrency in 2020 and is planning to set up a digital payments system in around twelve countries, according to a report from the BBC.
The social media company would begin testing by the end of the year with more details to follow this summer. It is reported that Mark Zuckerberg, Facebook’s founder, has already met with Bank of England governor Mark Carney and US Treasury officials to discuss regulatory issues regarding cryptocurrencies. Facebook is also looking into currency transfer companies such as Western Union to determine faster and cheaper ways for international transfers. The firm is also in contact with online merchants where they are discussing ways for the businesses to accept cryptopayments for lower transaction fees.
GlobalCoin, PayPal and Zuckerberg’s secretive cryptocurrency plans
As a Financial Times article, titled “Why Facebook wants to launch its own currency,” wrote: “If any company can take a cryptocurrency mainstream, it is Facebook.” The article noted that the firm’s secret cryptocurrency project, called “Libra” will try to launch a “stablecoin”, a digital currency pegged to the dollar. “Facebook has all the prospects to propel crypto into everyday lives . . . in the next three to five years,” said an anonymous source to the FT. But, they added: “there are headaches to be worked out,” as the executive pointed out the complexities that small businesses will face when having to deal with a “stockpile of the currency” and how they “would be able to account for it on their books.”
The BBC noted that Facebook wants to facilitate “affordable and secure ways of making payments, regardless of whether users have a bank account.” The purpose here is “to disrupt existing networks by breaking down financial barriers, competing with banks and reducing consumer costs.”
Nicknamed Project Libra, Facebook’s cryptocurrency plans were revealed last December. Already, in May 2018, Facebook had put together a blockchain team. Bloomberg reported that “Facebook’s blockchain unit now counts 50 employees. A significant number of those employees—about one in five—used to work at a single company: PayPal Holdings Inc. This quasi-reunion, driven by the group’s leader, former PayPal president David Marcus, is the latest signal of Facebook’s wider ambitions to integrate payments into its platform.”
Bloomberg also revealed that India will be the first country to test the new currency as it holds potential for expansion. “The product could eventually allow users to transfer money for remittances via WhatsApp through stablecoin,” Bloomberg added. Regular payments are currently tested through a product called WhatsApp Pay.
According to reports from Coindesk, on May 2, Facebook registered a company called “Libra Networks” in Geneva, which will “provide financial and technology services and develop related hardware and software.” Reuters which covered the story earlier in May, said that the company would focus on “blockchain and payments as well as data analytics and investing.”
Facebook has declined to comment and requested that all parties involved sign non-disclosure agreements.