Facebook plans its own crypto-currency GlobalCoin

letitroll

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These so-called 'stable coins' pegged to US dollar / Euro or whatever fiat currency - I don't see these as replacements to bitcoin at all which is rather trying to sit outside the fiat currency system (& its regulations KYC / AML)

A US/Euro pegged Facebook coin would IMO be in practical terms nothing more than a Facebook gift card or pre-loaded virtual FB debit card where you could exit back into Fiat currency with some fees scalped of the top....might be an interesting business angle for Facebook to move into the remittance market or the underbanked globally.

When I buy a Costa Coffee gift card.........what is it only a Costa Crypto Coin pegged to euros :)
 

tecate

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What is the point of this?
A pivot by Facebook to get into digital money and payments. They've been wanting to get into payments for years.

If it is successful will it complement Bitcoin or replace it?
Those that believe in decentralised cryptocurrency loathe the idea of a Facebook Coin. However, others believe that it will help the sector as a whole. Firstly, Facebook has the reach to bring this to the mass market. Conditioning people towards the use of digital currency is no easy thing but moves like this help. Secondly, there's a need for a number of stablecoins in the sector - at least for the next ten years.
Lastly, they don't really compete. Decentralised crypto is completely different to centralised crypto. There may be an element of competition in terms of the payment of goods and services. But it depends on whether Bitcoin will play an active role in that context or just develop as digital gold/store of value.
 

NoRegretsCoyote

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It is not clear whether this is an actual cryptocurrency which will fluctuate in relation to fiat currencies, or just a voucher system pegged to the US dollar and guaranteed by facebook.

The link says that FB staff would be able to take their salaries in the currency. This seems bizarre.

If it's a crypto, why on earth would you put up with the exchange rate risk on a monthly if not daily basis?

If it's just a voucher, then what's the point? If my employer said I can have your salary in One4All vouchers or euros I know which I'd pick.
 

tecate

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It is not clear whether this is an actual cryptocurrency which will fluctuate in relation to fiat currencies, or just a voucher system pegged to the US dollar and guaranteed by facebook.
It's highly unlikely to be anything other than a stablecoin - pegged to the USD.

The link says that FB staff would be able to take their salaries in the currency. This seems bizarre.
If it's a crypto, why on earth would you put up with the exchange rate risk on a monthly if not daily basis?
If it's just a voucher, then what's the point? If my employer said I can have your salary in One4All vouchers or euros I know which I'd pick.
I think it's unlikely any staff member would be taking pay in tokens for the foreseeable. As regards the comparison with vouchers, I think it goes beyond that. See what's happening in China with Alipay and Wepay - spills over into payments for other things.
Facebook had an interest in starting this off in India with integration through whatsapp. Again, it could have more implications in other markets initially. However, remittances and cross border payments still has to be disrupted.
 
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tecate

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Check out Caitlin Long's article on Forbes re. the upcoming crypto launch by Facebook. I'm far, far from a fan of the Facebook organisation and have not been enthusiastic about them getting involved with crypto. However, IF Long is right in some of her assumptions, there are some interesting take-aways.

The whitepaper for Facebook's LibraCoin is expected to be released on June 18.
 

NoRegretsCoyote

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I get paid in euros and 98% of my spending is in euros.

Why would I want to use a crypto currency for payments that fluctuates with the yen, dollar, renminbi, etc?
 

EmmDee

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Check out Caitlin Long's article on Forbes re. the upcoming crypto launch by Facebook. I'm far, far from a fan of the Facebook organisation and have not been enthusiastic about them getting involved with crypto. However, IF Long is right in some of her assumptions, there are some interesting take-aways.

The whitepaper for Facebook's LibraCoin is expected to be released on June 18.
I realise no details have been published yet but based on the article and other reports - I can see this being popular in places with volatile domestic economies / currencies where mobile is the main access to internet and Facebook is almost synonymous with the internet. The article mentions Venezuela but places like India, many Southern and Western African countries and parts of SE Asia also come to mind. There the pegging against an international basket of currencies will probably be a benefit.

But - is this really a crypto currency in the same sense as BitCoin. I wonder will it have a distributed ledger at all - it doesn't sound like it needs it. In some ways it sounds like a variation of M-Pesa.

Maybe I've missed something
 

tecate

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I get paid in euros and 98% of my spending is in euros.
Why would I want to use a crypto currency for payments that fluctuates with the yen, dollar, renminbi, etc?
Nobody will be making you use it - so if you find it's of no benefit, don't. As regards why there's a reason to use it when you get paid in euro, well lets go back to 2010-ish. Run a search on AAM - you will find that there was a tonne of people here scrambling for options to ensure that in the event of Ireland being dumped out of the euro, their euro would be converted into Deutsche Mark or Guilder, etc.

That time has passed but the euro project remains inherently flawed - who's to say that we won't find ourselves in similar circumstances in the future - in which case, you'd be more than happy to have funds in a currency pegged to the leading world currencies.

Other than that, it's not going to be marketed to you - it's aimed at the developing world. Not officially confirmed but its understood that FB want to trial it in India to begin with. It will be integrated with whatsapp, FB and FB messenger. That's many people's experience of the internet. It's setting itself up to be internet money in that context.

What if you're an immigrant worker in a eurozone country and you remit currency back home. A ubiquitous practice. FX and remittance services are inequitably expensive. If a FB coin achieved traction, it could make in-roads into this.

I mentioned above about the past (and potentially future) euro turmoil. That's only in the ha'penny place by comparison with the issues with currencies in developing countries. At any given time, there is a list of currencies that are being mismanaged such that you have hyper inflation. I'm pretty sure you'd be happy to hold a currency that is stabilised against the worlds top currencies in that instance.

But - is this really a crypto currency in the same sense as BitCoin. I wonder will it have a distributed ledger at all - it doesn't sound like it needs it. In some ways it sounds like a variation of M-Pesa.
Maybe I've missed something
I don't think you've missed anything. See her point no. 6 in her article. To cryptocurrency purists, a facebook coin is likely to be centralised and therefore is not their idea of a crypto. That doesn't mean to say that it doesn't have the potential to make a certain level of impact. Your M-Pesa example is relevant. Furthermore, similar moves in China towards mobile money where Wepay and Alipay have become exceptionally popular suggests there's plenty of scope in other parts of the world for a move in a similar(ish) direction.
Many proponents of decentralised crypto believe this could develop into a stepping stone towards greater bitcoin adoption.
 

NoRegretsCoyote

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I mentioned above about the past (and potentially future) euro turmoil. That's only in the ha'penny place by comparison with the issues with currencies in developing countries. At any given time, there is a list of currencies that are being mismanaged such that you have hyper inflation. I'm pretty sure you'd be happy to hold a currency that is stabilised against the worlds top currencies in that instance.

So the euro is inherently unstable........but it's one of the world's top currencies that facebook will stabilise it's crypto against.

Fiat currencies in countries with stable economies and trustworthy central banks are going to be around for a while.

A choice between a crypto guaranteed by facebook, or a currency used daily by 500m people guaranteed by the ECB. I know which one I'll be using!
 

tecate

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So the euro is inherently unstable........but it's one of the world's top currencies that facebook will stabilise it's crypto against.
So in a scenario where euro was to be rolled back to national currencies, you think you'd fare better on a stablecoin spread over the top currencies (of which euro would be removed from the list at that point) or the Irish punt? If the euro was to perform badly - vs. a stablecoin averaged out over the worlds top currencies, with which would you be better off?

Fiat currencies in countries with stable economies and trustworthy central banks are going to be around for a while.
I never suggested that they weren't. Facebook are not suggesting that they're going to replace them. Most proponents of (real) decentralised crypto are not suggesting that either. There's no zero sum game here. Having said all that, you talk of 'stable economies'. That merry go round changes all the time. I already demonstrated to you of a very recent time when the euro didn't look all too stable which you seem to have ignored.

A choice between a crypto guaranteed by facebook, or a currency used daily by 500m people guaranteed by the ECB. I know which one I'll be using!
Nobody is asking you to make a straight choice between the two. However, if you wanted to send a remittance to parts unknown and it was going to cost you little or nothing in transaction fees as opposed to a shed load (as per current international wire transfers/SWIFT), maybe you just might look at the alternative if there was one.
Other than that, it's not all about you ;-) In fact, for the most part, it's not about you at all. There are some (relatively) stable economies and currencies - yes. But there are plenty of those that are not. This is aimed at the developing world for the most part.
 

EmmDee

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Nobody is asking you to make a straight choice between the two. However, if you wanted to send a remittance to parts unknown and it was going to cost you little or nothing in transaction fees as opposed to a shed load (as per current international wire transfers/SWIFT), maybe you just might look at the alternative if there was one.
Other than that, it's not all about you ;-) In fact, for the most part, it's not about you at all. There are some (relatively) stable economies and currencies - yes. But there are plenty of those that are not. This is aimed at the developing world for the most part.
It's an important point - in Kenya and other parts of West Africa, M-Pesa is the primary method of transacting (essentially a payment system based on the mobile phone network). We take for granted just how integrated and fluid the payments system in Europe is (SEPA) - despite complaints.

The traditional infrastructure is non-existent in many places. There is significantly more access to Facebook than to banking services. There is more access to mobile network shops than bank branches. Even the US is pretty clunky to be honest - and SMS / message based payments are increasing significantly there (especially for micro transactions).

So I can see a lot of take-up from this - especially if the conversion back to local currency is relatively easy. I'm just not sure it should be called a crypto-currency
 

tecate

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It's an important point - in Kenya and other parts of West Africa, M-Pesa is the primary method of transacting (essentially a payment system based on the mobile phone network). We take for granted just how integrated and fluid the payments system in Europe is (SEPA) - despite complaints.
Yes, China is the same with Wepay and AliPay - and the switch to mobile money.

The traditional infrastructure is non-existent in many places. There is significantly more access to Facebook than to banking services. There is more access to mobile network shops than bank branches. Even the US is pretty clunky to be honest - and SMS / message based payments are increasing significantly there (especially for micro transactions).
I had experience of this last week. I live in a developing country. Needed to pay someone (who lives in a city 7 hours away) a small amount of money. She is part of the unbanked - no bank account. There is a local version of western union that's quite popular here. Very easy to use. However, there really is money to be made out of poor people. It cost 17% in fees to send the few quid. Bear in mind that's a transfer of money - the same currency - within the same country. If you think then about all the immigrant communities worldwide sending billions of dollars worth of remittances back home, those guys are really getting screwed. It's an abuse that shouldnt be happening.

I'm just not sure it should be called a crypto-currency
It will be a digital token so can be described as a cryptocurrency but a centralised cryptocurrency. Notwithstanding that, we get the specific detail next Tuesday when the whitepaper is published.
 
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tecate

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Another trickle of info...
Visa, Mastercard, Paypal, Uber and others invest in foundation behind Facebook's new (centralised) crypto.
LINK

Further details to follow next Tuesday when whitepaper is expected to be published.
 

Gus1970

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