Janis is a cryptocurrency enthusiast and a bitcoin adherent. He has a background in video production, but for the past couple of years, he is a full-time crypto researcher and writer. He has a good understanding of multiple cryptocurrencies and loves to cover daily news. He considers himself a semi-bitcoin maximalist but always is open to any kind of new ideas that could be put on the blockchain. In his free time, he likes skateboarding and cars.
A Wyoming Blockchain regulator and so-called “crypto-mom” Caitlin Long has made some predictions on the upcoming Facebook’s cryptocurrency dubbed GlobalCoin. She predicts that Facebook could potentially pay interest to its users.
Today, June 10, Caitlin Long has made 6 predictions on the upcoming Facebook‘s GlobalCoin cryptocurrency in a rather long Twitter thread. The most attention is put to the prediction where she says that Facebook will most likely pay interest to its GlobalCoin users.
“Facebook will pay interest to users of its cryptocurrency, which will eventually lead to populist calls to repeal subsidies at the heart of the US banking system,” she writes on Twitter.
1/ 6 PREDICTIONS about what @Facebook's #cryptocurrency means. Grab the popcorn bc I analyzed publicly disclosed info to make 6 predictions, of which 2 will be controversial (#2 and #6). @ForbesCrypto #Libra #bitcoin https://t.co/6EI55eyvUA— Caitlin Long ? (@CaitlinLong_) June 9, 2019
Backed Assets Could Be Stored in the Federal Reserve
Since it is a well-known fact that Facebook’s anticipated cryptocurrency will be a stablecoin, it will be backed by a large sum of fiat currency. This money will potentially be stored/held somewhere where it could generate interest. That is why Caitlin speculates that the place where to hold that amount of money could be the Federal Reserve.
Caitlin Long says that up to date, stablecoin issuers have generally pocketed the float on assets backing the coins. However, her next prediction is that Facebook won’t be able to pocket these big profits without sharing them with their users. Simply because of the fact that Facebook’s cryptocurrency will be the largest and most public crypto entity one has ever seen in this market.
“If Facebook doesn’t share these interest spoils with users, a chorus of critics will loudly publicize how much money Facebook and its partners are pocketing,” says Long.
According to Federal Reserve’s interest on excess rate, the Federal Reserve pays 2.35 percent.
3/ It's true that #stablecoin issuers generally pocket the float on the assets backing the coins, but I go out on a limb & predict there's no way @Facebook will be able to pocket these big profits w/o sharing them with users. To be clear I haven't seen @Facebook disclose this.— Caitlin Long ? (@CaitlinLong_) June 9, 2019
Long believes that Facebook’s GlobalCoin will face all kinds of regulatory uncertainty. In addition to this, she commented that she knows a perfect regulatory structure for it, hinting her Wyoming Blockchain Task Force and the state of Wyoming in general.
5/ That said, an independent foundation is a big positive for the project. Fourth, @Facebook's #cryptocurrency project will face all kinds of regulatory uncertainty. (I happen to know of an ideal regulatory structure for it…#Wyoming's #SPDI. @Tyler_Lindholm @GovernorGordon). ?— Caitlin Long ? (@CaitlinLong_) June 9, 2019
Next, she believes that the new cryptocurrency will reveal how much of the recently widely discussed Facebook 2.3 billion users are real. This is because in order to use the currency users will have to pass KYC procedures.
She goes on saying that Facebook will become a “huge data honeypot for governments globally with all the privacy and tax reporting implications such as data honeypot entails”. All-in-all, she asks quite a rhetorical question saying that, in the case of Facebook being struck with government regulations – “would it fight or fold?”
GlobalCoin Could Benefit Bitcoin Adoption
The last thing that Caitlin predicts is that the development of GlobalCoin could potentially boost the adoption of Bitcoin. She says that by “educating consumers about the benefits of crypto and improving the user experience, Facebook will pull more users into Bitcoin, whether it intends to or not.”
While Bitcoin is the king of cryptocurrencies, it is still the only ledger in the cryptocurrency field which is considered the most honest of all. People will recognize this as they embark with the new cryptocurrency.
“Facebook will greatly accelerate the pace of teaching people about cryptocurrencies. And when this happens, more people will turn to bitcoin for one simple reason—bitcoin is scarce, while Facebook’s cryptocurrency is not,” says Long.