Facebook plans to officially announce the existence of its cryptocurrency called "GlobalCoin" later this month. On the other hand, this new stablecoin, which means it's pegged to the U.S. dollar, is expected to be launched by 2020.
Facebook has also revealed more details about its new crypto. GlobalCoin will be available from special ATMs, or ATM-like machines, which will dispense this digital currency in exchange for dollars.
Facebook said some of its employees will be paid through GlobalCoin. When it's launched, GlobalCoin will allow users to store, trade, and exchange this crypto for dollars, according to Facebook.
GlobalCoin will also allow Facebook to exploit its more than 2 billion users by having them pay for merchandise and remit money. It will become a second massive revenue stream for Facebook, which presently derives practically all of its revenues from advertising.
Facebook's ad model is being flayed by privacy advocates, lawmakers, and the press for its use of user information without the user's permission.
Over the past years, Facebook has talked to monetary officials from the U.S. Department of Treasury and the Bank of England, about test launching GlobalCoin later this year. In April, Facebook CEO Mark Zuckerberg held talks with Bank of England governor Mark Carney about the opportunities and risks involved in launching GlobalCoin.
Analysts said Facebook wants to transform GlobalCoin into a digital currency that becomes an affordable and secure method for making payments. Facebook also wants to enable people to change dollars and other international currencies into GlobalCoin with ease.
In May 2018, Facebook hired David Marcus, president of PayPal between 2012 and 2014, to lead the new blockchain division responsible for launching GlobalCoin.
Facebook is recruiting third-party organizations to act as "nodes" that help manage the cryptocurrency. Nodes contain the computing power needed to resolve complicated mathematical equations used to validate transactions.
The firm is also holding talks with online merchants and money transfer firms as it looks for cheaper and faster ways for people without a bank account to send and receive money.
Facebook is particularly interested in launching GlobalCoin in India. It hopes GlobalCoin will allow Indian workers abroad to remit money back home to their families using WhatsApp.
GlobalCoin will need to overcome numerous technical and regulatory hurdles before its launch, however.
