Facebook’s Blockchain Push and How It Could Help Bitcoin

Facebook’s Blockchain Push and How It Could Help Bitcoin

By Benson Toti - min read

The upcoming Facebook stablecoin launch has already started to dominate crypto news. Their proprietary coin, GlobalCoin, will enable users to send funds to each other and make in-app purchases.

Not all of the details on the coin are known, but it seems like the former PyPal president, David Marcus, is helping to develop the coin. Over the last 6 months, more details have emerged about how Facebook intends to harness blockchain technology to create a new revenue stream.

As a company in constant competition, it makes sense that Facebook would keep their plans under wraps, but it seems like they were moving towards something fintech related as early as Fall of 2017. The timeline currently suggests that testing will begin at the end of this year in order to deliver an early 2020 launch.

Regulatory Issues Need to Be Addressed

One of Facebook’s main goals is to smooth out the regulatory landscape before their coin debuts, so as to avoid any further investigation from regulators. Part of this involves their current talks with the Commodity Futures Trading Commission, as well as talking to Coinbase and Gemini about potential liquidity solutions.

It makes sense they would do this, as they have far more to lose. Facebook is one of the biggest companies in the USA and is already being closely analyzed for the current structure of the company and how that affects privacy and competition. Unlike some brand new altcoin that is a complete upstart with everything to gain, Facebook needs to play by the book. This is one of the few advantages to being a massive conglomerate.

An aspect of these regulatory pressures is Facebook’s quest to keep WhatsApp, Messenger, and Instagram as part of the parent company. With anti-trust investigations underway, it seems like many legislators are using the breakup of Facebook as a campaign promise for the 2020 election.

Unlikely Bedmates

There is an irony to Facebook working with Gemini to provide liquidity on GlobalCoin, as it is run by the Winklevoss twins, who famously combatted Mark Zuckerberg over the ownership of Facebook and its intellectual capital.

Coinbase is also in talks, which makes more sense, as they are perceived as the global leader in terms of a trustworthy cryptocurrency exchanges. Their push into new countries and markets aligns with Facebook’s goals, and they could definitely be able to provide a high degree of liquidity for the coin.

Many people believe that GlobalCoin would provide additional legitimacy to Bitcoin and push it further up. The fact that the world’s largest social media company is so hellbent on launching their own coin lends credibility to the space, and would provide a useful way

Although a stablecoin that would be tied to the value of the United States dollar, the coin would also be tied to Facebook. This is where potential issues may arise regarding the power that Facebook will have over their own currency. Until now, most of the “altcoins” minted were relative unknowns with little ability to compete in the market. GlobalCoin, just by being related to Facebook, has the potential to push the entire technological sector forward a significant amount.

Whether GlobalCoin will move people to buy Bitcoin, we do not know, but it will for sure change the face of the industry as we know it right now.