The new cryptocurrency aims to streamline digital and physical transactions.
Facebook is planning to launch its crypto-currency by the first quarter of 2020.
Named GlobalCoin, the crypto-currency will facilitate digital payments for its 2.4bn monthly users.
But how does it all work?
By simply transferring major international currencies into digital coins, users will be able to purchase goods and services everywhere – and that includes online and in-store.
According to the BBC, the social media giant plans to roll out testing by the end of this year, and has already been in talks with Bank of England Governor Mark Carney to discuss risks and opportunities:
The social media giant wants to start testing its crypto-currency, which has been referred to internally as GlobalCoin, by the end of this year. 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.
The networking giant, which already owns Instagram and WhatsApp, is clearly aiming to disrupt the dominant financial landscape by offering more efficient solutions to banking:
[Facebook] is hoping to disrupt existing networks by breaking down financial barriers, competing with banks and reducing consumer costs.
Facebook CEO Mark Zuckerberg’s attitudes and intentions towards digital banking are already clear. Speaking at Facebook’s F8 developer conference in April this year, Mr Zuckerberg announced major changes to WhatsApp to allow for easier financial transactions:
“I think payments is one of the areas where we have an opportunity to make it a lot easier…I believe that it should be as easy to send money to someone as it is to send a photo.
What’s next for digital currency and the technology behind it? Just two decades ago, former Bank of England Governor Lord King said that central banks would become “irrelevant” if consumers began using digital currency as they do with conventional pounds and pennies.
And how far will major banks – and the financial industry as a whole – have to innovate to compete with the rise in digital crypto-currencies?
Matthew Berks is a Digital Marketing Assistant at Red Website Design, the UK’s leading low-cost website design company.