Digital Cryptocurrency
Here is a visual representation of the digital cryptocurrency, bitcoin alongside dollars in London on Dec. 7, 2017. Dan Kitwood/Getty Images

Facebook is consulting with monetary authorities in the United States and 11 other countries in advance of launching its own cryptocurrency called “GlobalCoin” in 2020.

Multiple media sources said Facebook is seeking advice about operational and regulatory issues from officials at the U.S. Department of Treasury and the Bank of England, among others, prior to test launching GlobalCoin later this year.

Last month, Facebook CEO Mark Zuckerberg held lengthy talks with Bank of England governor Mark Carney about the opportunities and risks involved in launching the company's cryptocurrency.

The firm is also in talks with online merchants and money transfer firms, including Western Union and other major remittance companies, as it looks for cheaper and faster ways for people without a bank account to send and receive money.

Sources said Facebook wants to develop GlobalCoin into a digital currency that provides affordable and secure ways of making payments. Facebook also wants to enable people to change dollars and other international currencies into its GlobalCoin with the minimum of fuss.

Cryptocurrency experts said GlobalCoin will likely be a “stablecoin” with its value pegged to U.S. dollar to forestall volatility. They noted Facebook still has to work hard to get its users to trust GlobalCoin after suffering years of scandals that have badly damaged its public image.

GlobalCoin and other similar cryptocurrencies, however, represent an existential threat to traditional banking networks that rely on a trusted intermediary (a bank or a respected financial firm) to act as a trusted go-between in a financial transaction. Cryptocurrencies will eliminate banks from this equation and with it billions of dollars in bank revenues.

Analysts say Facebook wants to disrupt existing banking networks by breaking down financial barriers and reducing consumer costs. Oddly, Facebook will have to partner with banks and brokers to attain this aim.

Facebook, however, is working against its reputation for lackadaisical security and disregard for user privacy as it pushes GlobalCoin.

GlobalCoin will need to overcome numerous technical and regulatory hurdles before it can be launched. Experts noted Facebook might be in for a tough time in India, which has taken a hostile attitude towards cryptocurrencies.

Sources said Facebook is keenly interested in boosting GlobalCoin in India. Facebook hopes GlobalCoin will allow Indian workers abroad to remit money back home to their families using WhatsApp.

In May 2018, Facebook hired David Marcus, president of PayPal between 2012 and 2014, to lead the new blockchain division responsible for launching GlobalCoin.