Facebook’s highly anticipated cryptocurrency, currently known as GlobalCoin, will go live in the near future. Speculation has been building ever since Facebook formed its blockchain division last year, and the coin is now closing in on a launch date. Facebook could release GlobalCoin before the end of the year, and it is very likely that Facebook will make an official announcement by June 18th. But one question remains: what will GlobalCoin be used for?
Facebook has over 2 billion users that could instantly be onboarded to a new payment platform, and it is a safe bet that Facebook will allow its users to send GlobalCoin to each other. It is also likely that GlobalCoin will be a stablecoin, meaning that its value will be tied to the value of the U.S. dollar or other fiat currencies. This means that most users will find GlobalCoin more convenient than Bitcoin, which is subject to rapid price fluctuations.
Reports from last year suggest that Facebook is planning to tap into the remittances market, allowing foreign workers to send funds to their home country. In December, Bloomberg suggested that Facebook’s stablecoin would initially be limited to users of WhatsApp in India. However, more recent reports suggest that GlobalCoin could quickly be rolled out worldwide: many sources now indicate that the coin will be available in twelve countries by early 2020.
Some commentators have speculated that Facebook will pay users to hold GlobalCoin. Caitlin Long, a Wall Street veteran and Bloomberg contributor, believes that Facebook will pay interest to its users. Others believe that Facebook is planning to use the coin for different incentives, perhaps as a reward for viewing advertisements. These incentives could help Facebook earn user trust and combat its critics?although Facebook itself has not confirmed any such plans.
GlobalCoin will probably be highly beneficial for business users and online merchants. Credit cards and payment processors usually charge fees of about 3%, and Facebook is reportedly slashing those fees, according to a recent report from the Wall Street Journal. Additionally, the company has been seeking investments from Visa and Mastercard, meaning that it may be working collaboratively to improve online commerce options, not simply undercutting its competition.
GlobalCoin will, without a doubt, benefit Facebook itself. Even if Facebook does not collect fees on transactions, it will need to make a profit. A new report from CNBC suggests that Facebook will charge a $10 million licensing fee to each node that wants to participate in the network. Some of this money will go toward backing GlobalCoin, but Facebook could keep some as revenue as well. Facebook could also benefit in other ways?for example, by monitoring its users’ spending habits.
Facebook’s upcoming cryptocurrency will have a wide variety of applications, and many of those will be driven by general users and business clients. The finer details are still murky, but the facts will become clear in the coming weeks. And, despite the fact that Facebook is a controversial company, its dominance over the online landscape means that it has the ability to attract plenty of users. When GlobalCoin finally goes live, there will be no shortage of potential applications.
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