E-Money and virtual currencies Facebook is planning to launch a cryptocurrency for digital payments by 2020. Dubbed “GlobalCoin”, the system is envisaged to provide a secure and affordable payment system even to the unbanked.
According to a report (link is external) by the BBC, GlobalCoin will be ready for testing in a dozen countries by the end of this year. In the runup, Facebook founder and CEO Mark Zuckerberg met with Bank of England governor Mark Carney last month, to discuss the project. Facebook has also broached the idea with US treasury officials.
The social media giant has 2.4 billion users worldwide. It also owns the private messaging application Whatsapp, which is popular in low and middle income countries. Last year, it was reported that Facebook was developing a payment technology known as StableCoin that would allow Whatsapp users to send and receive money on their phones. Mexico’s Santader Bank is already piloting national Whatsapp payments.
GlobalCoin will allow Facebook users to change US dollars and other international currencies into digital coins. The coins will then be used to purchase goods and services online. The ecosystem will include merchants and e-commerce platforms who will accept GlobalCoins as payment, as well as banks and brokers who will facilitate currency exchange to digital coins.
Facebook is mulling (link is external) over how to make the system affordable for it large user base. It is likely to face opposition (link is external) from privacy groups as well as banks. If successful, GlobalCoin could revolutionise digital payments by expanding online financial services across many nations and unbanked populations.