Facebook plans to cede control of its forthcoming cryptocurrency to outside backers, a move meant to encourage trust in the digital payment system and reassure financial regulators, The Information has learned. According to various media reports, details will be released in June this year, with CoinDesk stating that Facebook will formally launch GlobalCoin in 2020 with trials planned by the end of this year.
In recent months, the social network has courted dozens of financial institutions and other tech companies to join an independent foundation that will contribute capital and help govern the digital currency, according to people briefed on the plan. The digital token, which Facebook is expected to unveil later this month, is designed to function as a borderless currency without transaction fees and will be aggressively marketed in developing nations where government-backed currencies are more volatile, the people said.
In an emailed statement, crypto startup temtum founder and CEO, Richard Dennis said: “Facebooks’ GlobalCoin is going to continue to gain attention, not only within the crypto industry but in mainstream media, and its development is causing major financial institutions to take notice due to the scale of the social network’s audience.
“Is this good for cryptocurrencies as a whole? With regards to international exposure, it’s a positive but that may be where the positives end. With Facebook one of the biggest hoarders of personal data on the planet, there’s a complete contradiction of what cryptocurrencies are meant to be – no one entity should hold the power, the data or most importantly control user funds.
“Over the past decade, since Bitcoin first surfaced, a growing audience of primarily cryptographers, developers and entrepreneurs have been exploring how the theory of decentralization can positively impact global populations and industries.
“This has led to new communities forming who intend to develop next generation technologies to allow for the same level of social interaction, better financial inclusion and wealth distribution, all without a single entity profiting on such a vast scale, as has been seen with the likes of Facebook, Google and Twitter.
“But these communities are a long way off a tipping point into mass adoption, where everyday consumers simply cannot see how a cryptocurrency will integrate into their daily lives – let alone understand why they shouldn’t just keep using money.
“As reports suggest Facebook are looking to hire network ‘Nodes’ for up to $10 million, it would seem the same issues that exist in the financial world now, will simply be present from the outset of GlobalCoin too.
“GlobalCoin has the audience to be a huge currency, achieving mainstream adoption but can it deliver on those values that underpin the cryptocurrency industry? Values that are very likely to appeal to the next generation of consumers who may also turn their backs on existing social media platforms.”