After months of rumor and speculation, social media giant Facebook is set to make official their forthcoming cryptocurrency globalcoin.
According to a report published by CNBC on June 5, the company is going the make the announcement this month, finally bringing an end to the hearsay surrounding the project. Interestingly, the report also includes details that Facebook will be shopping control of the project out to third parties.
Decentralized Facebook Coin?
The social media platform is looking to give globalcoin the appearance of decentralization by dispersing control over the stablecoin, likely in an attempt to garner more interest from the community of crypto. The rumored details involve third parties being utilized as ‘nodes’–similar to those found in bitcoin–with Facebook reportedly charging up to $10 million for the privilege of participating.
Highlights from the report also include the establishment of a physical ATM that will allow users to transact and exchange fiat for globalcoin. Similar to existing machines that allow users to buy bitcoin, litecoin and other popular cryptocurrencies, Facebook’s proposed ATM will increase accessibility to their stablecoin.
The report also claims that Facebook will allow and possibly encourage employees to take their salary in globalcoin, giving the option to forgo fiat altogether. Proponents of crypto have highlighted being paid in digital currencies as a major step forward in industry adoption. However, given the price volatility of bitcoin and other top cryptos, the option has been critized and highly underutilized.
Stablecoin For Employee Pay
Unlike bitcoin, globalcoin is planned to be developed as a stablecoin, with the value likely pegged to the US dollar or a subset of several currencies. The end result is that employees of Facebook–and possibly other companies–will be able to draw their paychecks in digital currencies without worrying about a sudden shift in price. This provides the advantage of a broader appeal for the currency, while also opening it to greater adoption through merchant and other organizations looking to shield themselves from the high volatility of crypto.
With former Paypal executive David Marcus heading up Facebook’s blockchain and payments division, the company seems well suited to tackle growing interest in digital currencies on their massive social media platform. However, it remains to be seen whether the crypto community will fully embrace Facebook’s entry into the industry.
Despite what the company says about issuing nodes to external operators, globalcoin will–in all likelihood–be a highly centralized currency relative to bitcoin and other cryptos. Decentralization has been a hallmark feature of crypto since the beginning. Coins like XRP, in spite of having the third largest market capitalziation, have been maligned for their close association to parent and development companies.
There is almost no way for Facebook to release globalcoin without having massive control over the currencies development and providing some assurance for its valuation. The PR disaster that would follow issuing a stablecoin, only to have the price tank or fail to gain any user traction, would be unpalatable for Facebook’s shareholders.
While Facebook may have a large role to play in the development and adoption of crypto, it’s unlikely the company will be a shining example for decentralization.