After much buzz that Bitcoin created in the money world, now Facebook too has something to offer. ‘Stablecoin’, a new comer in the world of digital currency. It will allow users to send money and do payments across Facebook, WhatsApp and Instagram. The currency is expected to launch on Tuesday.
A big project for Mark Zuckerberg
The road to destination is bumpy for the billionaire’s business plans. Many hurdles he has crossed and several things are yet to overcome. This is not something that is destined to remain in certain geographical limits. The whole world is sure to come under its impact. Especially, after the varied experiences on Bitcoin that were filled with vicissitudes, the concern on this new wave is intense.
Let us see what challenges Facebook is facing?
There are varied situations to tackle from all the directions and every time Facebook needs to give its best.
- Political and regulatory scrutiny
Oh, the strict gatekeeper! This is why Facebook has hired a UK bank lobbyist Ed Bowels who will be the director of public policy, London. Due to the scrutiny of the currency on the political as well as regulatory aspect in Europe, this recruitment is a very important and enhancing addition. There is no word from Facebook or Mr. Bowel who worked at StanChart for 12 years. However, things are clear and the world knows that. He will join in the month of September.
- Meeting with the important names to smoothen the path further
In the month of April, Mark Zuckerberg went to meet the Bank of England governor Mark Carney. The aim was to discuss the current and future aspects of finance and share the plans on the global digital currency.
- Early talks with US derivatives regulator
So much is there to do for Mr Zuckerberg. To bring the idea of currency in action faster, he was and is still in contact with important people in the US. It is certainly not an easy task to convince them on the critical issue of privacy. The need is also to stick to the know-your-customer and money-laundering rules. These are imposed on every financial institution. Stablecoin creators cannot be an exception in this case.
- What the European Commission’s director-general has to say?
Olivier Guersent, who works in European Commission for financial stability (as director-general) has his own take. On Stablecoin and its impact on stability of finance he said –
“Facebook has a right like anyone else to launch itself on the market. But the issue is really the connection with the rest of their activities and the collection of data. That’s the angle through which we could tackle it.”
- One more appointment
Former UK deputy Prime Minister Nick Clegg has joined to lead the global affairs and communications team. The interpretations on his joining express the Facebook’s concern on its relations with Brussels, where this social media giant is facing the complicated issues on online disinformation, data privacy and hate speech. Previous notable profiles of Sir Nick are – member of the European Parliament and European Commission trade negotiator.
The prime issues in the focus
There are certain constraints that may blur the trust factor and Mr Zuckerberg may need to work hard on them.
Recent years saw some issues like –
- Russian interference and fake news matter that influenced 2016 U.S. election
- Cambridge Analytica privacy scandal
- Personal information of 30m users was exposed in the recent cyber attack issue.
The latest buzz on digital currency
- According to the latest news and information, Facebook will release a white paper for stable coin on coming June 18.
- Backers for the crypto – According to a report in the Wall Street Journal, Facebook’s cryptocurrency has backers to invest money. Mastercard Inc., PayPal Holdings Inc., Uber Technologies and Visa Inc. are among the firms that intend to invest $10 million each. The money will go to the consortium, which is the governing authority for the cryptocurrency.
- Coin usability still murky – Every passing day the world is getting more eager about the new digital coin. However, its use is still unclear and that may lead to countless doubts in the coming days too.
Stablecoin is expected to reduce volatility. It is generally attached to a currency. This nature counters the values of blockchain in which transactions are governed and verified by a network.
This is perhaps, just the beginning of an exciting chapter that is sure to mark many landmarks in the future. However, it is important to ALWAYS keep an eye on the issues of privacy and data infringement. The greater things are in the list of expectations. Fingers crossed, let us see what comes in the coming days.