The Facebook Cryptocurrency Project Is Much Wilder Than We Expected

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Paying employees in GlobalCoin? Launching associated ATMs for the public to buy in? Charging $10 million USD to run a node on the network?

Those possibilities are all in play for Facebook according to technology media outlet The Information, which reported this week the social media giant was, indeed, spinning out its forthcoming cryptocurrency project to “outside backers” — specifically an independent foundation — after reports earlier this year suggested the company had considered doing so.

Facebook Blockchain

Anonymous sources close to the matter said Facebook was set to formally unfurl the stablecoin token, which has tentatively been called GlobalCoin within the company, at some point in June. That matches reporting from New York Times tech journalist Nathaniel Popper, whose own sources said back in April that Facebook’s coin could be released before the third quarter of 2019.

$10 Million to Operate a Node

In addition to soliciting major institutions and enterprises to join the project’s foundation, Facebook seemingly wants to license the tokens nodes. Anonymous sources told The Information the social network had floated figures as high as $10 million as a licensing cost to node prospects.

Accordingly, with the price to directly participate in the network in that range, the company has only the largest participants in mind. Last month, it was revealed Facebook had, in the very least, reached out to financial industry powerhouses like Visa, Mastercard, and Western Union. Whether these companies were the pitched the idea of running one of those $10 million nodes remains to be seen.

As far as Western Union goes, it seems more likely that if they were playing ball with GlobalCoin, it’d be in serving as a fiat on-ramp to the token. That’s speculation, though. What’s more than speculation, per The Information, is that Facebook is planning to 1) build physical ATM-like machines so people in the general public can buy the coin and 2) to give merchants on-boarding bonuses for accepting the currency.

Adoption Drivers

Those could be quite the adoption drivers, especially if GlobalCoin — or whatever its formal name will be upon launch — is listed on major cryptocurrency exchanges, where users could then interact with other projects in the cryptoeconomy. The aforementioned Nathanial Popper has previously reported Facebook’s reached out to several exchanges regarding listings.

Another adoption dimension to consider is the sheer scope of Facebook’s brand, which encompasses Instagram, WhatsApp, Messenger, and beyond. If the token becomes popular, it may become a mainstay on these platforms, which in turn would likely cement the specter of cryptocurrency tech in mainstream society.

A Financial Safe Haven?

Notably, The Information reported the token “will be aggressively marketed in developing nations where government-backed currencies are more volatile.” That assertion meshes with several elements of the project that have already been purported.

For one, when word first broke about the stablecoin in December 2018, its initial pilot was apparently set to be around facilitating remittances in India for WhatsApp users. India is currently slotted by the World Trade Organization as a developing country.

Moreover, with mainstream currencies like the Russian ruble and the Turkish lira exhibiting high amounts of volatility in recent years, GlobalCoin has reportedly been designed to be the opposite, i.e. a financial safe haven. Facebook’s blockchain team is said to have created the token as a “basketcoin,” which will be pegged to a large fund of several major fiat currencies to ensure its price’s stability.

It’s a bold move, to be sure: if carried out, Facebook will be asserting that it can do money better than nation states that have their own central banks.

It seems there’s no turning back now, either way. In May, the social media titan registered Libra Networks, a subsidiary firm, in Switzerland. The entity will cover Facebook’s blockchain, fintech, data, and investing services.

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William M. Peaster is a professional writer and editor who specializes in the Ethereum, Dai, and Bitcoin beats in the cryptoeconomy. He's appeared in Blockonomi, Binance Academy, Bitsonline, and more. He enjoys tracking smart contracts, DAOs, dApps, and the Lightning Network. He's learning Solidity, too! Contact him on Telegram at @wmpeaster

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