This isn’t the first time that Facebook has dipped its toe into the world of cryptocurrency.

A decade ago, Facebook created “Facebook Credits”, a virtual currency that enabled folks to purchase items in apps and on the social network.

After less than two years, they ended the project because nobody took any notice of it.

Or – and this is more likely – no one trusted them enough to commit.

Now they’re trying again, reports the BBC.

This time they plan to launch ‘GlobalCoin’, with the mind to set up digital payments systems in roughly a dozen countries in 2020.

Facebook is expected to outline plans in more detail this summer, and has already spoken to Bank of England governor Mark Carney.

Founder Mark Zuckerberg met Mr Carney last month to discuss the opportunities and risks involved in launching a crypto-currency.

Facebook has also sought advice on operational and regulatory issues from officials at the US Treasury.

Facebook claims that the cryptocurrency will provide affordable and secure ways of making payments, regardless of whether or not users have bank accounts.

The project will see it join forces with banks and brokers that will enable people to change dollars and other international currencies into its digital coins.

A small group of co-founders are expected to launch the Swiss-based association in the coming weeks.

This is, thankfully, not what the coins will look like, but we appreciate this mock-up artist’s work:

Way to make him seem less like a robot.

One of the biggest obstacles the company will face is getting users to trust them. They have a sketchy track record when it comes to handling everyone’s personal data.

Facebook has also discussed the process of identity checks and how to reduce money laundering risks with the US Treasury.

It is believed that Facebook and its partners want to prevent wild swings in the coin’s value by pegging it to a basket of established currencies, including the US dollar, euro and Japanese yen.

The cryptocurrency is only in the initial phase, and although it looks like they want to launch it by the beginning of next year, that timeline might be a bit ambitious.

Here’s what Blockchain expert David Gerard had to say:

Crypto-currencies are vulnerable to fluctuations in value, which Gerard said could create a barrier to the success of Facebook’s so-called GlobalCoin.

“Normal people don’t want to deal with a currency that’s going up and down all the time,” he explained.

But Garrick Hileman, a researcher at London School of Economics, said the GlobalCoin project could be one of the most significant events in the short history of crypto-currencies.

Conservatively, he estimated that around 30 million people use crypto-currencies today. That compares to Facebook’s 2.4 billion monthly users.

At the same time, Facebook has been experiencing a mass exodus of late, so those numbers could go down.

Trust Facebook at your peril.

[source:bbc]