Facebook plans its own cryptocurrency

The social media giant’s chief executive, Mark Zuckerberg, has met with Bank of England governor, Mark Carney, to discuss his plans for a new means of digital payment.

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Facebook, the social network whose parent company owns Instagram and WhatsApp, will launch a new cryptocurrency early in 2020. In plans known as "Project Libra", the currency, "GlobalCoin", will allow users to make digital payments in several countries.

Unlike Bitcoin, which has seen huge fluctuations in its value in recent years, the currency will be pegged to a number of national currencies, including the dollar and the euro, which may make it a more stable store of value.

In a sign of how important this is to his company's future, Mark Zuckerberg has met with central bankers in the US and Europe to discuss the regulatory future of the cryptocurrency industry. With over two billion users on its platform, there is vast potential for Facebook to become a major or even dominant player in the international payments market. The founder and CEO has stated his intention to make it “as easy to send money to someone as it is to send a photo.”

Facebook has become increasingly controversial in recent years following a number of scandals over its use of user data and the role its advertising may have played in elections in the US and Europe.

Critics of the GlobalCoin proposals have also pointed out that it will not be decentralised, its supply and issue will be managed centrally, and, being pegged to other currencies, it will not strictly be independent of central banks. Some are questioned, given these conditions, the extent to which GlobalCoin can be categorised as a genuine cryptocurrency.

Jonny Ball is a Special Projects Writer for Spotlight and the New Statesman

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