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Facebook plans to launch “GlobalCoin” currency in 2020

27 Jun 2019

According to Facebook, it is planning to set up a digital payments system in about a dozen countries by the first quarter of 2020. Even though, there are many questions about FaceCoin or Libra as the company wants people to call it, anyone will be able to buy Libra via its platforms and store it in a digital wallet called Calibra and then be able send Libra to other users, it said, "as easily and instantly as you might send a text message".

Facebook’s Libra is a huge and ambitious project which it is targeting to a new global currency. According to David Marcus, the executive in charge of Facebook's cryptocurrency project, it is about giving to billions of people more freedom with money and at the same time "righting the many wrongs of the present system".

An enormous project that has seen an alliance of big payments players such as PayPal and Visa, Silicon Valley players such as Uber and Lyft and major venture capital firms as well as a kind of Avengers, Endgame of technology and finance superheroes come together with the goal to make the world a better place.

Libra mission statement makes great play of the 1.7 billion people who do not have a bank account and to the fact of how expensive it is for them to transfer money to relatives.

However what is not clear yet is how Libra will go through the complex business of verifying the identity of these people to comply with anti-money laundering regulations, without incurring lots of costs. A man who has worked for a couple of money transfer companies said that "Compliance is the really hard and expensive part".

This will affect not just un-banked Facebook users in Kenya but also to lucrative markets such as the United States and Britain, where national identity cards do not exist as an easy way of verifying someone’s identity.

Facebook insists that Facecoin or Libra, will have all the benefits of Bitcoin without the downside. It will be "global and instantaneous" like the original cryptocurrency but at the same time secure and stable.

On the other hand, Bitcoin sceptic David Gerard says it is not clear why Libra is being implemented as a cryptocurrency or needs a blockchain, an immutable distributed ledger visible to anyone. "The usual reason for saying 'blockchain' is to lend magical marketing dust to unmagical ideas," he says.

Facebook says its Calibra subsidiary will keep financial and social data strictly separate and users will not be targeted with adverts based on their spending habits.

"It is Facebook-led initiative, yes," Mr. Marcus says. "But by the time it comes to market next year, it won't be a Facebook-controlled initiative. We'll have the exact same voting rights as all the other members".

Facebook pitch is: You may not trust us, but you should trust Visa, Paypal, Uber and the rest.

Finally, this is officially the latest foray by a tech giant into the payments sector, after Google Pay, Apple Pay and Samsung Pay, even though none of those services are based on a crypto-currency.

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