The social media giant has an estimated 2.4 billion monthly users, and would pose an immediate challenge to Amazon, PayPal and other e-commerce, payments and money transfer platforms, most of whom do not take cryptocurrency payments.
The GlobalCoin would likely be pegged to the price of the US dollar, Japanese Yen and the Euro on a one-to-one basis. The so-called “stablecoin” would be a hedge against the wild swings in value other cryptocurrencies have experienced.
It would also provide a way for those who do not have bank accounts to have an easier path for money transfers and purchases. Overall, the project has the potential open a vast new revenue stream for Facebook, which has been under fire over privacy and political concerns. Any rollout would have a major hurdle to overcome, that of trust, since buying and selling records would be a part of Facebook’s data.
Facebook, which also owns Instagram and WhatsApp, has been widely reported to be exploring its options in blockchain and cryptocurrency, but the BBC report is the first to give a name to the coin and the internal designation, report Project Libra.
Earlier in May, the US Senate’s banking committee wrote an open letter to Facebook chairman Mark Zuckerberg regarding how the cryptocurrency would work, what data would be collected, and what consumer protections would be offered.