By CCN: According to local reporting, Facebook’s Global Coin might soon be used to value barrels of oil, according to one wide-ranging article about the impact of technology on the Russian economy. Warning that further American dominance in technology will likely lead to increased sanctions…
Warning that further American dominance in technology will likely lead to increased sanctions and other problems for Russia, including trade and tariff imbalances.
The Russian government has been back and forth about the fate of cryptocurrency in the large region. On the one hand, they might end up with regulations that require one to be a qualified investor to buy cryptocurrency. On other, the Kremlin is pushing for rules to be completed as soon as possible.
Russians are primarily concerned with expanding their energy industry and gaining regional dominance over whatever they possibly can. In a potential bid to boost local technology companies, the Russian government recently gave itself the authority to enact a “kill switch” for the outside Internet. The legislation sparked massive protests.
Using Global Coin, Facebook’s forthcoming crypto offering, as a new way to measure the price of oil would indicate that it’s likely to be a widely useful crypto. One question, of course, is why they don’t just use Bitcoin or some other standard crypto asset? The source, Igor Sechin, explicitly “admits” that Facebook’s crypto will be used in the “near future.”
If we consider the massive size of Facebook’s user base, and the potential impact on stores to accept it, especially in places where people travel from all kinds of countries, then Facebook’s crypto might have some legs. People suddenly don’t need to worry about a currency exchange when they get to the airport – they use GlobalCoin. These are problems that any crypto could traditionally solve, but GlobalCoin has the added benefit of coming preloaded with a massive number of users.
The Facebook crypto project comes loaded with other questions as well. For example, if people can be banned from the platform for their political beliefs, that means that if the currency gains much dominance, those people will be increasingly cut out of the financial system.
Genuinely the opposite of the primary intended use case for cryptocurrency, the problem either puts a cap on the overall expansion of Global Coin or it raises the question of what makes something a utility. If Facebook were suddenly regulated as a utility, would the Global Coin inherently be a utility coin?
Most payment providers understand that there needs to be some finality in transaction settlement. However, within the bounds of customer agreements and merchant contracts, there’s only so much they can do. It’s unclear what, if anything, Facebook’s coin project could do to help with this.
The primary drive for something like it would be the universality of the Facebook app. Everyone has it, so if it can suddenly be used to make payments, then it’s a digital option available to most everyone. For kids, it can act as a gift card that works in many places. For adults, especially those that travel to foreign countries, it can act as a way to avoid currency exchanges and go straight to making payments.
If massive tourist destinations like China begin accepting Global Coin, in the same way they do things like WePay, then you will see a massive increase in demand. The coin could truly go global. Or it could just be something that’s talked about from time to time, but sees no real adoption. That’s always the gamble.