Facebook’s GlobalCoin may be a ‘historic initiative’smartdegrees
(Article published by Daniel Kuhn with same title in CoinDesk)
Facebook’s “crypto opportunity” comes with high expectations. “We believe this may prove to be one of the most important initiatives in the history of the company to unlock new engagement and revenue streams,” RBC Capital Markets’ Mark Mahaney and Zachary Schwartzman said.
The two experts expect the currency to be used for payments, commerce, applications and gaming — across Facebook’s ecosystem that includes image-based social media platform Instagram and encrypted messaging service WhatsApp. Mahaney and Schwartzman also repeated previously reported expectations that Facebook will release their currency’s white paper on June 18, following in Satoshi’s footsteps to explain the fundamental protocols that will underpin Libra, the internal codename for the project.
RBC said it plans to offer an analysis of the paper when it’s released, “to help investors analyze the underlying cryptoeconomics of the token.”
The currency is rumored to be a stablecoin backed by a number of global fiat currencies.
It has been in development for more than six months — though the company indicated it has contemplated enveloping cryptocurrency into the social network as far back as the end of 2017 — and has 100 staff working on its development. This includes two former compliance managers that migrated from Coinbase in May.
Facebook allegedly will offer employees the option to take their salary in the new currency. It has not been confirmed if the $514 billion company will offer incentive packages in GlobalCoin.
“More people will turn to bitcoin for one simple reason—bitcoin is scarce, while Facebook’s cryptocurrency is not. People will migrate over time to the most honest ledger for storing their hard-earned wealth—and that’s not fiat currencies or derivatives thereof, including Facebook’s cryptocurrency,” wrote Caitlin Long of the Wyoming Blockchain Task Force.
Now everyone is as excited about the product. Crypto-notable Charlie Shrem said: «I’m just gonna say it. I think the “FacebookCoin” is an attempt by big tech, banks and credit card companies to lure people away from Bitcoin into “better, easier, crypto”, which is nothing more than a fiat coin being masqueraded as crypto. Millions will be fooled.»
A lobbyist from Standard Chartered will join the Facebook crypto-unit staff in September, possibly to assist with political and regulatory scrutiny in the EU. Facebook emissaries have reportedly been having lunch with the Governor of the Bank of England to see how the project may progress in the country amid Brexit.
Visa, Mastercard, PayPal and Uber are all backing GlobalCoin to the tune of $10 million dollars. This is in addition to the $1 billion in VC funding Nathanial Popper of the New York Times has reported that Facebook is seeking, either as an investment or for collateral. For as much as Facebook has raised, the company has also acquired smart contracts producer, Chainspace, to assist development.
RBC has an outperform rating on Facebook with a price target of $250 a share. Facebook’s stock is up more than 35% this year as of Thursday’s close of $177.47 a share.