Facebook’s GlobalCoin – Compliance Disrupted By Samson Williams

Mark Zuckerberg and the Winklevoss twins recently buried the ole hatchet and decided to plan global financial (and surveillance) domination together. Along with Coinbase, they’re collaborating to create the “GlobalCoin” cryptocurrency. Hyperbole aside, this is actually a big deal. In this article, we’ll outline some of the potential impacts of Facebook’s GlobalCoin on compliance management professionals in the banking and finance sectors.

To begin, let’s create a hypothetical scenario in which GlobalCoin becomes a thing.

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Let’s say Facebook provides all its users with 500 Facebook GlobalCoins (FBGC) as free “coupons”. These coupons can be redeemed dollar for dollar for anything sold on Facebook. Now I know you’re thinking, nothing is really sold on Facebook. Except for a few billion dollars worth of ads, random stuff similar to Etsy/eBay and tickets to events.

Many people won’t use their 500 FBGCs, while other people would happily use more of them. So, you’ll have people who have FBGCs they’re happy to sell and people who will happily buy them, preferably at a discount.

Enter Gemini and Coinbase and many other exchanges. Oh, it should be mentioned that the Winklevoss Twins (Founders of Gemini) and Zuck (Facebook’s Founder/CEO) know each other from their days at Harvard and shortly thereafter when they sued each other over ownership of Facebook.  

Before we get to Gemini and Coinbase, if the FBGC is even remotely a cryptocurrency then P2P (Peer 2 Peer) transactions from one FB crypto-wallet to another FB crypto-wallet should be possible. If that is the case, FB users can exchange /trade/sell FBGC directly between each other.

Facebook then becomes an exchange interface…with 2.38B users. What’s the market cap on 2.38B users x 500 FB Global Coins? Let’s make the math easy and just give them all 1000 FBGCs each. After all, when you have an existing platform, it operates as a marketplace and the FBGC would operate like a rewards/customer retention incentive.

So, there are about 2,380,000,000,000 trillion FBGCs in circulation in the above hypothetical model. That’s 2.38T to make the math easier. Facebook accepts them on a dollar for dollar exchange for any goods, services, products on FBs platform. Does FB lose money on the FBGC? No. They gain more users. Giving away “FBGC coupons” is like pouring 2.3T dollars worth of gas on their user acquisition fires.

Granted, this isn’t “real” money. They’re basically loyalty points for using the FB platform. And probably no more than 10% of users would use them. So we’re really only talking about $23B worth of gas. I did go to public school, so let’s say my math is all off and we’re actually only talking about a paltry $2.3B. In the grand scheme of things, that sum is so tiny that I don’t even know why I’m writing about it.

However, the real magic and twist to this are how new users of Facebook get Global Coins. How do new users or users who have run out of FBGC get new coins? They buy them from Coinbase, Gemini or any other exchange. What happens when 1B new users need/want your cryptocurrency “coupon”, aka Facebook Global Coin? You become a bank, with market demand to print digital currency.

There are some nuances to this. Is Facebook a bank? Do they need a money transfer license? What about the regulations to all this, how do they apply? What are the regulations for this? Well, if we look at other models from Airbnb to Uber, why wait for regulations? Why not roll out whatever you’re going to roll out, creating a community, marketplace and demand so great that by the time regulations catch up, they’ll be whatever you wrote them to be. Just look at how Facebook treats data privacy.

What does this mean for compliance?

Honestly, I don’t know. I can see a few scenarios where KYC/AML is baked into Facebook’s platform already. I also see how it gets easier to move “money” globally, from Point A to Point B using the FBGC. I see a HUGE learning curve for compliance professionals, as new and ever more exotic, blockchain based, financial instruments and transaction methods are created. I can foresee an FBGC ecosystem and economics that are novel, creative and ultimately deceptive AF.

The cat and mouse game of crypto-compliance gets all the more difficult if compliance professionals have never even opened a cryptocurrency wallet. It’s sorta hard to expect kittens to catch rats when they’re organizationally blind. Of course, it is not all doom and gloom. As a compliance professional, if you’ve read this far at least you’re aware of why this is matters and can continue to educate yourself about blockchain, cryptocurrencies, tokens (everything will be tokenized by the way) and Facebook’s Global Coin.

The Real Disruptions – Predictions on the Future of Company Issued Cryptocurrencies  

FBGC on Whatsapp threatens banks and Amazon. Google “WeChat” and you’ll understand why. WeChat has over 1B daily users and in addition to banking/payment services, it also is a great messaging app. WeChat is FB and Whatsapp blueprint to dominance.

Amazon will probably make a deal with Facebook, enabling in-app purchases from Amazon. After all, FB may have a cryptocurrency but Amazon owns the logistics and the last mile of delivery. Together, they’re a force to be reckoned with. Not only from a business perspective but also from a sovereignty / Merchant King perspective.

The rise of a new generation of Merchant Kings will threaten democracies and sovereign states. This is actually the gorilla in the room that no one is addressing. What happens when Companies with trillion dollar value and GDPs of their own “print’ their own money?

Micro-transactions on 5G. This is an article in and of itself. Just remember the phrase.

Data privacy and credit / social scoring. There is such a dark future of 1984isque that company issued cryptocurrencies create. We need government intervention now. Alas, users will sell their freedom for convenience before they even realize they’re no longer citizens of a State but of an online empire.

Conclusion

What does the future hold? Disruption. How will we rise to meet the new challenges of company-issued cryptocurrencies? We shall see.

Thank you for reading my post. On LinkedIn and at the Crowdfunding Professionals Association I regularly write about technology, cannabis, crowdfunding, real estate, health and compliance investing trends. To read my future posts simply join my network here or click ‘Follow‘. Also feel free to join me on Twitter, Facebook, Instagram, or YouTube.

About Samson Williams

Samson is an internationally recognized anthropologist and expert in Operations & Technology, Blockchain, Cannabis, cryptocurrencies, mobile payments, mortgage finance and organizational change management in FinTech.

Samson is ranked among the globe’s top innovative technology professionals for his cutting-edge research and applications in crowdfunding, tokenomics and digital securities. Samson is a professor at the University of New Hampshire School of Law , Columbia University and Principle consultant at Axes and Eggs. For business inquiries, Samson can be reached at [email protected]

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