Blockchain Watch

Facebook’s Stablecoin “GlobalCoin”

June 2019 will see the revealing of Facebook’s own cryptocurrency.

It is reported that their blockchain-based coin will serve as a means of payment for transactions on the social media platform. Similar to Tether, Facebook’s GlobalCoin will be a so-called stablecoin which means that it will be pegged to another, usually less volatile asset.

While Tether is pegged to the US dollar – as its ticker USDT gives away, GlobalCoin is said to be bound to several currencies in order to avoid volatility. Implications of Facebook entering the blockchain space, according to Ryan Radloff, CEO at CoinShares, include a growing level of understanding for blockchain-related products, ideas, and social consequences.

A more critical perspective would be to wait for details of the underlying technology, especially the level of decentralisation that Facebook aims for. Estimated launch is in Q2 2019.

No USD-Stablecoin Plans on Binance

Not only Facebook, but also Binance, the world’s largest cryptocurrency exchange, will start issuing a stablecoin as of July or August, according to Binance’s CFO Wei Zhou. As opposed to Tether, Binance claims its stablecoin will be demoninated in GB pounds and backed 100% by cash and securities to further reduce volatility.

According to Bloomberg, the Hong Kong-based exchange intends to issue additional coins pegged to other currencies, “though it has no plans to introduce a U.S. dollar-backed stablecoin”.

Zhou continued, “from the users’ perspective, only certain portions of the world use the dollar. Other users use other currencies, and we feel it should be reflected in stablecoins as well." Despite China’s strong rejection of appropriate Decentralised Ledger Technology, these developments might be welcomed by the government.

The Evolution of Cryptocurrency Exchanges

Following the death of Gerald Cotten, Canadas largest crypto-exchange QuadrigaCX closed it virtual gates and is now subject to investigation of multiple government agencies.

Amongst others, the FBI is required to provide US-American victims with information and assistance.

As reported by various sources including Ernst and Young, who serve as the appointed monitoring entity for this case, QuadrigaCX owes its former 115,000 customers in total between US$160mn and US$200mn, while only having some US$21 mn in assets. According to Coindesk.com, the exchange began bankruptcy proceedings in April. The federal bureau conducts its own accounting and published a questionnaire for victims, attempting to gather relevant information.

At over 250 exchanges supporting active trading, many of which subject to attacks or fraud, clarity over which are honest and safe remains a gamble. Nevertheless, Binance has been able to maintain its reputation so far, which in times of fast growth and regularly significant developments is not an easy thing to achieve.

Author: Patrick Lehner