Facebook, the next internet and currency dictatorship

Trepidation should be on everyone’s list of priorities as Facebook attempts to muscle in on our industry by getting it wrong

The company that banned our entire industry now wants to launch its own fake, unbacked currency…

One of the most attractive key attributes of electronic trading for retail customers is the absolute self determination that it offers.

Ever since the pioneers such as Matchbook FX founder Josh Levy began to take steps in the mid 1990s to bring institutional trading and genuine market connectivity to the living room rather than the Wall Street trading room, the freeing up of market data and removal of barriers to the capital markets system has been a major R&D focus of our industry.

The combination of internet speed and freedom, cloud based hosting and even data distribution being provided by mainstream internet companies such as Amazon (AWS cloud is the defacto trade reporting medium due to its GDPR benchmarking) the world’s markets have never been more democratized and well organized.

Until the megalomaniac internet firms get involved.

Anyone who operates an electronic trading company or analytics firm that provides data and news to traders will already likely be an expert in how to navigate Google’s faceless requirements, the internet giant having a default monopoly on what is and what is not visible, and all firms having to adhere to their terms on indexing, advertising and information authenticity and duplication.

Google, in its all encompassing control of the global internet and services that rely on it, is effectively everybody’s boss and has total control over the way products are marketed, distributed and listed, and over how things are paid for online, and how displays are served.

What if one of these giants began meddling in the fake currency business?

Facebook is now going down that road.

Google, for all of its Orwellian attributes, is at least a well organized company that we can rely on for complete accuracy and is therefore a well respected reference point for internet governance, however Facebook is a social media site first, and an internet company second, and therein lies the problem.

Facebook views itself as a Google-level internet company and often bands together with Tier 1 internet firms like Google and Yahoo in order to monitor advertising and internet distribution. It also has similar methods of not allowing free speech, choosing who operates and what context things are operated in via its channels, which include messenger WhatsApp and its business-facing social media pages, which now often get removed without notice.

Imagine if that methodology was in charge of a widespread currency?

Facebook has this week confirmed that it is planning to set up a digital payments system in about a dozen countries by the first quarter of 2020, which could certainly extend into offering services to online brokerages.

The social media giant wants to start testing its own digital currency, which has been referred to internally as GlobalCoin, by the end of this year. Facebook is expected to outline plans in more detail this summer, and has already spoken to Bank of England governor Mark Carney.

Founder Mark Zuckerberg met Mr Carney last month to discuss the opportunities and risks involved in launching a digital currency, which in itself is of note because most digital currency dreamers who do not come from our industry nor belong in it would never get near the Bank of England or any central currency issuer, largely because the authorities quite rightly are intent on dismantling the crypto scene completely. This therefore demonstrates the absolute power of Facebook.

Facebook has also sought advice on operational and regulatory issues from officials at the US Treasury. The firm is also in talks with money transfer firms including Western Union as it looks for cheaper and faster ways for people without a bank account to send and receive money.

Facebook which owns WhatsApp and Instagram, has stated that it is hoping to disrupt existing networks by breaking down financial barriers, competing with banks and reducing consumer costs.

Not by offering a totally unstable crypto currency which would put any investor at the mercy of a company which has no reporting responsibilities to official financial institutions and wilfully removes business websites from its pages for reasons which cannot be questioned.

This is a step that all brokerages and tech providers should avoid. We, as an industry, should be proud of our own achievements in producing some of the world’s most transparent, well connected, fast and accurate execution systems, information and data entities and trade processing for multi asset solutions. That should be viewed as way ahead.

And all this from a company that had the audacity to deem all FX industry ads unfit for their network….

Read this next

Retail FX

Financial Commission adds FX broker Bold Prime to membership roster

The Financial Commission today announced that it has added Bold Prime to its member roster, which is made up of online brokerages operating in FX, derivatives and cryptocurrency markets.

Digital Assets

Despite crypto winter, Cake DeFi paid out $58 million in Q2 rewards

According to its latest ‘Transparency Report,’ Cake DeFi continued its growth trajectory in the three months through June 2022, even as the entire crypto industry experienced macro challenges this quarter.

Retail FX

SimpleFX Review: Cryptos, Spreads, Pros & Cons

SimpleFX combines years of Forex and cryptocurrency experience with a focus on offering resources to retail traders. 

Retail FX

Ironbeam becomes CME clearing member and launches MT5

“The direct clearing aspect along with our low-latency proprietary trading tools and technology solutions make Ironbeam the ideal trading destination.”

Institutional FX

Top 0.07%: oneZero makes it to Inc. 5000 of fastest growing companies in America

oneZero started out by serving the foreign exchange trading community, developing and executing technology that could scale with the growth of the FX market.

Industry News

CFTC wins case against broker for secretly taking other side of client orders in block trades

“As we said at the outset of this case, the illegal use of inside or confidential information undermines confidence in markets and will not be tolerated.”

Technology

BankiFi raises $4.8m to bring embedded banking platform to North America

“Our mission is to make all aspects of cash management and payments easier for SMBs everywhere, and this investment is another huge step to making that a reality.”

Executive Moves

Shieldpay hires ex-Payoneer Chris Andrews as Head of Sales

“We’ll be expanding our position in existing markets and accelerating growth into new verticals, whilst building on our direct and indirect channels.”

Digital Assets

Crypto.com secures preliminary approval to operate in Canada

Crypto.com, one of the longest-established crypto platforms, has become the first digital asset platform to sign a Pre-‘Registration Undertaking’ with the Ontario Securities Commission (OSC) in Canada.

<