Facebook’s hush cryptocurrency project isn’t being publicly talked about by the company, but rumors about the supposed “stablecoin” are already doing the rounds in tech circles.
What’s the latest news about Facebook’s coin?
Everyone is waiting for Facebook to announce its digital currency, but the company is not giving any definitive news about the coin. If the latest rumors are true, Facebook’s new offering will only be a cryptocurrency in the name. It will not have any kind of utility that is usually offered by Bitcoin.
Is it possible that Facebook’s coin will be something like Ripple’s XRP, a highly centralized digital currency? Earlier there were reports about the so-called “GlobalCoin” by Facebook will be a stablecoin. The value of the digital coin will be pegged with the US Dollar, just like Tether, Circle, Paxos Token, or Gemini Dollar. However, if that happens, Facebook will be entering a market with several competitors already in line. It will also be interesting to find out whether this digital coin will also be included among the trading options in cryptocurrency exchanges and auto trading robots like the Global Crypto App and Bitcoin Code.
The idea behind a digital currency
Cryptocurrency has become a loose term thrown around by companies very frequently. However, a cryptocurrency is not just any digital coin one can come across on the internet. It is a blockchain-based digital asset which provides decentralized offerings and works on a consensus model like proof-of-work (PoW) or Proof-of-Stake (PoS). This ensures a key element of the cryptocurrency ecosystem- censorship resistance, which can only happen within a completely decentralized infrastructure. Bitcoin allows this kind of setup to work.
This is also the reason why Bitcoin users don’t get thrilled by some announcements that could have moved markets upwards in a frenzy. Recently, an app called Spedn announced that it would allow users to pay at major retailers like Starbucks and Whole Foods using digital currencies. The problem is that Spedn is a custodial wallet which makes the users’ asset more censorable and more controllable- exactly the opposite of Bitcoin.
The reports about Facebook’s GlobalCoin suggest that it wouldn’t be any different from Cash App or PayPal. It will bring the functionalities of a traditional digital wallet to the users but will have two buzzwords “blockchain” and “cryptocurrency” attached to it. The company is reportedly talking to banks and other traditional financial institutions about its coin offering. It has even hired two former members from Coinbase’s compliance team.
With all these facts in the notice, GlobalCoin looks like a highly centralized and controlled offering that works only within the legal ambit.