Facebook is finalising a digital payments system called ‘GlobalCoin’, which is expected to be available across 12 countries by the start of 2020.
After reports that the tech giant met with a number of financial institutions for investment into a secret cryptocurrency project earlier this month, the BBC reveals that testing on the virtual currency will begin this year.
Facebook’s aim is to ensure those without a bank account can make secure payments and the Big Tech will collaborate with banks and cryptocurrency exchanges to exchange fiat currencies into virtual coins, placing the company in a better position to further disrupt traditional lenders and fintech startups trying to do the same.
On May 2, Facebook registered a new entity called “Libra Networks” in Geneva, which will “provide financial and technology services and develop related hardware and software.”
The Swiss-based association will launch in the next few weeks, Facebook is planning much more and may convince online merchants to accept the cryptocurrency in return for lower transaction fees. The social media giant is also in discussions with Western Union to provide cheaper remittance alternatives for the unbanked population.
Mark Zuckerberg is already in talks with Bank of England governor Mark Carney and the US Treasury to ensure that risks are avoided and regulations complied with.
This comes after the social media giant was criticised for mishandling of user data and led to the US Senate asking the CEO how the digital currency will work and what protections will be offered.
This isn’t the Zuck’s first punt at crypto: around 10 years ago, Facebook Credits was launched for people to purchase items in apps, but the project was shut down two years later.