Tech industry insiders and cryptocurrency entrepreneurs are divided on the prospects of Facebook’s (FB) much-anticipated new “GlobalCoin.”Some think it will be a game-changer that spurs crypto adoption.
Others predict an expensive turkey that goes nowhere.Facebook plans to launch its own cryptocurrency — dubbed “GlobalCoin” — next year, according to reporting by the BBC, the Wall Street Journal, the Financial Times, and Bloomberg.
The company has over 60 employees working on the secretive project internally.
“They have almost like a SWAT team that’s very talented,” Tim Byun, the CEO of Silicon Valley-based OKCoin, told Yahoo Finance UK. “They’re serious about it.
”The social media giant has not commented on the reports but there is speculation that the new currency could be used to reward users for watching ads on its platform and spent at major retailers, not just on Facebook. It will be reportedly be pegged to the dollar.
“That’s super exciting,” Antoni Trenchev, the cofounder and managing director of crypto lending business Nexo, told Yahoo Finance UK when asked about the project. “Talking about adoption, who better than Facebook?”
Trenchev is one of a number of crypto enthusiasts who think Facebook’s foray into the industry could prove a tipping point. Cryptocurrencies first emerged with the creation of bitcoin in 2009 but have struggled to find mainstream use or adoption in the decade since.
With 2.3bn monthly users, Facebook could change that. If even a small number of its users adopt the new GlobalCoin it could radically increase the number of people interacting with cryptocurrencies.
“Anything that gets people thinking in terms of financial units that are not just dollars or not just at a bank opens people’s minds to new things,” Erik Voorhees, the cofounder of crypto exchange Shapeshift, said.
Reports about Facebook’s crypto ambitions coincided with a small revival in prices and the official launch of ‘GlobalCoin’ could provide another boost.
“Everyone of those headlines helps because it just spurs more interest in the space,” Steve Quirk, the vice president of trading at US stockbroker TD Ameritrade, told Yahoo Finance UK.
“I’m not saying Facebook announcing this is going to necessarily create a pop in the digital asset space, but it’s going to create interest.”
View photos
Facebook CEO Mark Zuckerberg has reportedly held meetings with Bank of England governor Mark Carney.
Photo: MATT DUNHAM/AFP/Getty Images
Facebook CEO Mark Zuckerberg appears to be planning for big things from his new project. He has met with Bank of England governor Mark Carney, one of the world’s most prominent central bankers, to discuss the implications of creating a new currency, according to the BBC.
“The scale that a coin on Facebook’s platform could achieve is something to reckon with,” ING economists Teunis Brosens and Carlo Cocuzzo wrote in a note sent to clients last week.
The social media giant is likely looking to China’s WeChat for inspiration. The chat app has over 1bn users, mostly in Asia, but 600m of them also use it for payments. It is a huge money spinner.
Not everyone is so excited by Facebook’s plans.“How on earth are they going to succeed with crypto when they already launched payments for the Messenger platform and that went nowhere?
” Christian Lanng, the CEO and cofounder of supply chain finance platform TradeShift, told Yahoo Finance UK.
Facebook launched payments through its Messenger app in the US in 2015 and expanded it to Europe in November 2017. The service failed to capture users’ imaginations and Facebook last month announced it was discontinuing Messenger payments in Europe.
“You’re essentially taking a business proposition that you’ve already failed at and adding cryptocurrency,” Lanng said. “You’re just adding complexity and something users don’t understand. I don’t exactly see that as a recipe for success.”
View photos
Facebook's founder and CEO Mark Zuckerberg reacts as he speaks at the Viva Tech start-up and technology summit in Paris, France, May 24, 2018.
Photo: REUTERS/Charles Platiau
Lanng believes that the spur to get into cryptocurrencies is not user demand but the string of negative headlines related around Facebook’s treatment of user data and fake news.
“What is evident is Facebook is desperate for a future story that doesn’t involve abusing the users as the world see it right now,” Lanng said.“But this is classic Facebook clunky thinking.
I don’t think they’ve paused and asked would anyone want to do that. Will I use Facebook just because I get money for viewing ads? I think that’s missing the point to begin with.”
Recent negative headlines could also pose problems for the launch of GlobalCoin.
“Has Facebook done enough to rebuild their credibility around privacy for users to trust them with their money?” Simon Peters, an analyst at online investment platform eToro, said.
Tom Chippas, the CEO of crypto business ErisX, echoed these concerns. He told Yahoo Finance UK: “Do we want a crypto token built on a closed system with privacy concerns that not the entire world accesses?
“If their token is going to trade and be freely available — fantastic.
But if it’s a closed ecosystem — I don’t know that the world wants another reward point that they can only spend at certain merchants.”Questions about how open the system will be are not just academic.
ING’s Brosens and Cocuzzo point out that the more centralised the currency is the more control Facebook will have and, therefore, the more scrutiny the social media giant must face.
“Strictly speaking, cryptocurrencies are decentralised,” they wrote. “With Facebook’s coin, there is one centralised party which issues and manages the coin on its own platform... So referring to GlobalCoin as a cryptocurrency is wrong, or at best irrelevant.
”Facebook has so far not commented on any of the reports surrounding GlobalCoin. However, reporting from the Financial Times and the Wall Street Journal suggests the new currency will be relatively open.
The FT reported that Facebook is in discussion with cryptocurrency exchanges about listing the new currency for exchange and the WSJ reported that Facebook is talking to online merchants about accepting the new token.
Still, Chippas’s question is one of many that industry observers are asking.“How open is it going to be? How tied is it going to be to only Facebook networks?
Are they going to open source it? All of the things that you would ask any other startup in this space,” Maire Wieck, the general manager of IBM Blockchain, told Yahoo Finance UK.
Chippas said: “I think the conversation is super important so those questions can get asked.”Facebook declined to comment on “speculative reports” when contacted by Yahoo Finance UK about the project.
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Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at @OscarWGrut.
Others predict an expensive turkey that goes nowhere.Facebook plans to launch its own cryptocurrency — dubbed “GlobalCoin” — next year, according to reporting by the BBC, the Wall Street Journal, the Financial Times, and Bloomberg.
The company has over 60 employees working on the secretive project internally.
“They have almost like a SWAT team that’s very talented,” Tim Byun, the CEO of Silicon Valley-based OKCoin, told Yahoo Finance UK. “They’re serious about it.
”The social media giant has not commented on the reports but there is speculation that the new currency could be used to reward users for watching ads on its platform and spent at major retailers, not just on Facebook. It will be reportedly be pegged to the dollar.
“That’s super exciting,” Antoni Trenchev, the cofounder and managing director of crypto lending business Nexo, told Yahoo Finance UK when asked about the project. “Talking about adoption, who better than Facebook?”
‘It’s going to create interest’
Trenchev is one of a number of crypto enthusiasts who think Facebook’s foray into the industry could prove a tipping point. Cryptocurrencies first emerged with the creation of bitcoin in 2009 but have struggled to find mainstream use or adoption in the decade since.
With 2.3bn monthly users, Facebook could change that. If even a small number of its users adopt the new GlobalCoin it could radically increase the number of people interacting with cryptocurrencies.
“Anything that gets people thinking in terms of financial units that are not just dollars or not just at a bank opens people’s minds to new things,” Erik Voorhees, the cofounder of crypto exchange Shapeshift, said.
Reports about Facebook’s crypto ambitions coincided with a small revival in prices and the official launch of ‘GlobalCoin’ could provide another boost.
“Everyone of those headlines helps because it just spurs more interest in the space,” Steve Quirk, the vice president of trading at US stockbroker TD Ameritrade, told Yahoo Finance UK.
“I’m not saying Facebook announcing this is going to necessarily create a pop in the digital asset space, but it’s going to create interest.”
View photos
Facebook CEO Mark Zuckerberg has reportedly held meetings with Bank of England governor Mark Carney.
Photo: MATT DUNHAM/AFP/Getty Images
Facebook CEO Mark Zuckerberg appears to be planning for big things from his new project. He has met with Bank of England governor Mark Carney, one of the world’s most prominent central bankers, to discuss the implications of creating a new currency, according to the BBC.
“The scale that a coin on Facebook’s platform could achieve is something to reckon with,” ING economists Teunis Brosens and Carlo Cocuzzo wrote in a note sent to clients last week.
The social media giant is likely looking to China’s WeChat for inspiration. The chat app has over 1bn users, mostly in Asia, but 600m of them also use it for payments. It is a huge money spinner.
‘You’re just adding complexity’
Not everyone is so excited by Facebook’s plans.“How on earth are they going to succeed with crypto when they already launched payments for the Messenger platform and that went nowhere?
” Christian Lanng, the CEO and cofounder of supply chain finance platform TradeShift, told Yahoo Finance UK.
Facebook launched payments through its Messenger app in the US in 2015 and expanded it to Europe in November 2017. The service failed to capture users’ imaginations and Facebook last month announced it was discontinuing Messenger payments in Europe.
“You’re essentially taking a business proposition that you’ve already failed at and adding cryptocurrency,” Lanng said. “You’re just adding complexity and something users don’t understand. I don’t exactly see that as a recipe for success.”
View photosFacebook's founder and CEO Mark Zuckerberg reacts as he speaks at the Viva Tech start-up and technology summit in Paris, France, May 24, 2018.
Photo: REUTERS/Charles Platiau
Lanng believes that the spur to get into cryptocurrencies is not user demand but the string of negative headlines related around Facebook’s treatment of user data and fake news.
“What is evident is Facebook is desperate for a future story that doesn’t involve abusing the users as the world see it right now,” Lanng said.“But this is classic Facebook clunky thinking.
I don’t think they’ve paused and asked would anyone want to do that. Will I use Facebook just because I get money for viewing ads? I think that’s missing the point to begin with.”
Will people trust Facebook?
Recent negative headlines could also pose problems for the launch of GlobalCoin.
“Has Facebook done enough to rebuild their credibility around privacy for users to trust them with their money?” Simon Peters, an analyst at online investment platform eToro, said.
Tom Chippas, the CEO of crypto business ErisX, echoed these concerns. He told Yahoo Finance UK: “Do we want a crypto token built on a closed system with privacy concerns that not the entire world accesses?
“If their token is going to trade and be freely available — fantastic.
But if it’s a closed ecosystem — I don’t know that the world wants another reward point that they can only spend at certain merchants.”Questions about how open the system will be are not just academic.
ING’s Brosens and Cocuzzo point out that the more centralised the currency is the more control Facebook will have and, therefore, the more scrutiny the social media giant must face.
“Strictly speaking, cryptocurrencies are decentralised,” they wrote. “With Facebook’s coin, there is one centralised party which issues and manages the coin on its own platform... So referring to GlobalCoin as a cryptocurrency is wrong, or at best irrelevant.
”Facebook has so far not commented on any of the reports surrounding GlobalCoin. However, reporting from the Financial Times and the Wall Street Journal suggests the new currency will be relatively open.
The FT reported that Facebook is in discussion with cryptocurrency exchanges about listing the new currency for exchange and the WSJ reported that Facebook is talking to online merchants about accepting the new token.
Still, Chippas’s question is one of many that industry observers are asking.“How open is it going to be? How tied is it going to be to only Facebook networks?
Are they going to open source it? All of the things that you would ask any other startup in this space,” Maire Wieck, the general manager of IBM Blockchain, told Yahoo Finance UK.
Chippas said: “I think the conversation is super important so those questions can get asked.”Facebook declined to comment on “speculative reports” when contacted by Yahoo Finance UK about the project.
————
Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at @OscarWGrut.
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Francisco Gimeno - BC Analyst Again, we are just listening to rumours and speculations. Is really FB going to launch a Globalcoin? Even with all negative news around it? Do they trust that their captive global market will easily use it? What are the consequences for the whole purpose of a decentralised digital economy if so? We really need more real information here.