More than 2 billion users spending one currency, controlled by one billionaire. What’s to worry about?
'Sometimes even bitter billionaire rivals need each other. Mark Zuckerberg and the Winklevoss twins fell out over the founding of Facebook Inc. but they appear to have buried the hatchet over the blockchain.
According to the FT, Gemini, the crypto exchange founded by the “Winklevii,” has held talks with Facebook over the social network’s plans to roll out its own crypto-currency, which would probably be used to make payments and purchases across Zuckerberg’s empire. The talks suggest something “bigger and more open” than previously imagined by the company, according to the FT: A liquid, tradeable currency that’s used far and wide.
How far, and how wide? Well, in terms of ambition, it’s not far off something Dr. Evil from the Austin Powers movies might come up with. According to the BBC, Facebook’s crypto-based system – humbly labeled “GlobalCoin” – will be rolled out next year across about a dozen countries. That’s more than the euro zone started with.
Unlike Bitcoin, Facebook’s aim is not to bring down the established financial system, but to co-opt it. The social network is said to be seeking the blessing of governments, central banks and regulators. It also wants to partner with brokers and money-transfer firms, and to strike deals with online merchants.
Zuckerberg will obviously do his best to make his new project sound as trustworthy and above-board as possible when it’s finally launched. GlobalCoin is said to be a so-called “stablecoin,” which are usually pegged to a major currency like the U.S. dollar to minimize volatility. So, in theory, one of Facebook’s tokens would never be more valuable than the dollar that backs it – unlike the boom-and-bust prices of Bitcoin. Presumably, Facebook would also keep things plain-vanilla at first in terms of the digital currency’s uses, offering simple retail deals or money transfers to minimize the risk of loss for its more than 2 billion users.'
Read more: Dr. Evil Would Love Facebook’s “GlobalCoin”