Analysis News

GlobalCoin (GLC) will have problems on Facebook

GlobalCoin (GLC) cryptocurrency, which is being developed for payment on Facebook, is expected to be launched in 2020. But the Americans have already calculated that this coin will have problems with distribution.

GlobalCoin, Libra or Facebook Coin?

Immodest name adopted inside Facebook for cryptocurrency – Globalcoin. Mark Zuckerberg has never been modest. But he was always careful. He has now held talks with the Bank of England, the US Treasury, Western Union, VISA and MasterCard, Coinbase and even with the Winklevoss brothers, owners of Gemini exchange and his long-time competing friends. All talks with one goal: to identify and reduce the risks associated with the launch of the native Facebook cryptocurrency, which at different times and according to various sources was called Facebook Coin or Libra. And now – GlobalCoin.

Negotiations with Mark Carney, the Governor of the Bank of England, as reported by the BBC, related to the possibility of this institution to take part in the launch of the coin. Although earlier Zuckerberg stated that he plans to avoid the involvement of bankers in the circulation of his cryptocurrency, in order to reduce costs for users and eliminate financial barriers. Regulatory issues were discussed with the US Treasury, as one might guess. And the notorious AML too. With Western Union – the ability to conduct non-banking transactions.

Negotiations with VISA and MasterCard concern the possibility of attracting investments in the amount of $ 1 billion. Zuckerberg also negotiated with the well-known venture capitalist Tim Draper. And finally, the talks with the exchanges are conditioned by the need to convince them that the coin will be liquid, fully backed by US dollars.

However, as shown by research firm Diar , Zuckerberg should be wary of something completely different. The Facebook user base does not at all contribute to the rapid adaptation of cryptocurrency. 55% of those who regularly use FB are people over 35, the number of older people who do not know cryptocurrency and is not willing to use them is growing rapidly.

On the other hand, teenagers leave FB and prefer YouTube. Only 50% of US teens use Facebook in comparison to 85% that use YouTube.

In the US, there are only 10% of FB users, therefore, other countries are considered for launching of GlobalCoin first. And as an opportunity – backing stablecoin by the other fiat currencies. Perhaps it will be India again. A year ago, FB tested WhatsApp Pay service here and immediately squeezed out competitors such as Alibaba’s Paytm. In India, WhatsApp and FB have 300 M users each.

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One comment

  1. You’ll never know the impact Facebook can have with the reach and resource available to them. In many places, Facebook is still very much a powerhouse social media.

    Also, IMO Diar (either on purpose or otherwise) did not take into account its reach to younger demographic via Instagram, not to mention it’s control on Whatsapp which itself has well over 1.5 Billion users across the world.