Facebook, the social media giant, has long been the rage with the introduction of Facebook coins, but recently it has been reported that they are launching another coin, called the Global Coin, which will be issued in about 2020. And more details about the Global Coin plan will be released in the coming months.
Facebook added that it had consulted U.S. Treasury officials and Bank of England Governor Mark Carney on the opportunities and regulation of the plan. The plan is internally known as the Libra Project.
It is reported that Facebook registered a new entity in Geneva called the Libra Network on May 2, which will “provide financial and technical services and develop related hardware and software”.
Facebook wants to create a brand-new digital currency that allows users to get a reasonably priced and secure payment service regardless of whether they own a bank account or not. Not only that, but Facebook, which owns WhatsApp and Instagram, also wants to break down traditional financial barriers and subvert traditional transfer methods by reducing consumer transaction costs and competing with banks.
Encrypted currency is a virtual currency that can be used to pay for any real-world services, such as buying food and housing. Because of the block chain technology of ledger which stores block information in computer network, all transaction information based on encrypted currency is stored in chronological order. Instead of being managed by centralized institutions like banks, it provides a safer and more transparent de-centralized platform.
Compared with banks and large companies, the biggest attraction of encrypted money lays on the block chain technology that supports them, which bypasses traditional banking networks and can significantly reduce the time and cost of cross-border remittances. It can also ensure the security and anonymity of users by preventing tampering with or hijacking the network.
By introducing encrypted currency, Facebook can effectively digitalize its assets, and achieve rapid global transfers, settlements and payments through Facebook’s block chain network. Based on this network, Facebook can theoretically establish a platform for cross-border transactions of various commodities, which will undoubtedly broaden the development space of Facebook in the future.
It was reported that Zuckerberg met with the governor of the Bank of England last month to discuss the opportunities and risks of starting an encrypted currency. What’s more, he also sought advice from U.S. Treasury officials on operational and regulatory issues. Zuckerberg was also negotiating with remittance companies such as Western Union. In addition, according to the Financial Times, two people familiar with the matter said that Facebook had been negotiating with Coinbase and Gemini Exchanges to provide third-party, regulated platforms for its users to store and exchange assets. They also said that the company had also been discussing market creation and liquidity issues with Jump and DRW, Chicago’s leading high-frequency trading companies. This also shows that the Libra Project has been put on the agenda and is definitely on the way.
Some people hold the belief that Facebook’s encrypted currency may change the foreign exchange and remittance industries. But it remains to be seen how the encrypted currency will go.
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