Tech giant Facebook is reportedly finalising plans to launch its own cryptocurrency with an ‘expected rollout date’ by the start of 2020.
Its crypto project is referred to as ‘GlobalCoin’, with the currency expected to be available across 12 countries according to a report by the BBC.
Furthermore, the report said that the founder of the social media network, Mark Zuckerberg, has already discussed the opportunities and risks involved in launching a cryptocurrency with Bank of England governor Mark Carney and the US Treasury.
Speaking to PaymentExpert, Matthew Harrod, VP Europe at Processing.com, explained why he is “not surprised” tech giants such as Facebook have entered the financial sector and the critical mass they possess will give them a huge advantage upon launching a currency/token.
He said: “Any ICO that has launched over the last few years has had the challenge of building value for a customer base and then having to actually build that customer base.
“Facebook definitely has the base and depending on how it will be used could be a real success story. It will be interesting to see which of the other tech giants will now follow suit.”
Facebook wants to begin testing by the end of this year and is expected to outline further plans this summer.
The company is also reportedly in talks with a number of online merchants and transaction firms, including Western Union, to help launch and support its proposed payments platform.
Lorenzo Pellegrino, CEO of Skrill, NETELLER and Income Access, described the news as a “major development for the industry.”
He commented: “The general criticism around crypto has been that it is not a currency in the truest sense, because of the little practical use beyond being a store of wealth and an asset to trade. We may see users have the ability to buy a variety of products through GlobalCoin and recognise the value of their cryptocurrency in the real world.
“For cryptocurrencies to develop into a credible alternative to fiat currencies they need to make the leap from simply having value to being a widely accepted payment method, both online and on the high street. To adapt to this shift, retailers will need to ensure they have the processes in place which enable them to accept crypto at the checkout.
“There’s no doubt that developments such as the forthcoming Facebook launch may well act as a further catalyst for this adoption.”
Facebook’s aim is to provide a currency and platform for its 2.4 billion monthly users to change dollars and other international currencies into digital coins.
These coins can then be used to make payments or transfer money without the need for a bank account.
However, Facebook has faced a huge backlash in recent times due to its handling of data and its lack of protection over consumer privacy; the launch of a cryptocurrency and payment platform will undoubtedly come under tough regulatory scrutiny.
The US Senate and Banking committee addressed concerns in a letter to Zuckerberg questioning how the company would safeguard consumer financial information and privacy.
The firm has already tested the digital currency waters having previously established Facebook Credits, its own virtual currency that enabled people to purchase items in apps on the site. However the currency was shut down in 2012.
Harrod concluded: “This is a major move that can certainly change the view of our sector in general for investors – especially if it results in more of a drive towards real time transactional based service.”