Andreas Antonopoulos Says Facebook’s GlobalCoin Cryptocurrency Can be a Real Threat to Banks
- Facebook’s GlobalCoin is expected to be competing against banks rather than against cryptos.
- These companies will have to follow strict KYC and AML regulations.
Andreas Antonopoulos, the recognized Bitcoin (BTC) and cryptocurrency expert, said that banks should be scared about Facebook’s GlobalCoin. Facebook is working on its stablecoin that may allow users to send and receive funds in a fast and easy way. This would clearly have a negative effect on banks rather than on other digital currencies.
Antonopoulos Warns Banks About Facebook’s GlobalCoin
There have been different individuals and analysts that raised questions about which are going to be the effects that Facebook’s GlobalCoin would have on the crypto space. Some users suggested that coins such as XRP were going to be affected the most, while others said that Bitcoin was going to be benefited since GlobalCoin would be the first digital currency to be used by many individuals around the world.
During a Q&A session, Antonopoulos, the author of Mastering Bitcoin, joked saying that he sold all his Bitcoin to buy Facebook’s GlobalCoin. He indeed said that virtual currencies that are launched by non-crypto companies lack the main characteristics of a virtual currency and to not stand on top of the five pillars: open, public, neutral, borderless and censorship-resistant.
About it, he commented:
“Anything that’s created by any centralized organization that is subject to specific laws, cannot achieve any of these five pillars. And the reason they cannot achieve is because the law prevents them from doing so.”
He has also mentioned that regulated companies are also limited by the Office of Foreign Assets Control’s (OFAC) that do not allow institutions to perform monetary transactions with a specific number of people and other organizations. It is also worth mentioning that OFAC requires financial firms to register the information of the sender and the receiver of the funds. The location has to be reported as well, which clearly goes against the ethos of virtual currencies.
In addition to it, these firms have to perform other KYC and AML controls in order for them to be able to operate in the market. Basically, Antonopoulos said that these companies would end up replacing banks.
“They are not a cryptocurrency, they are a bank. So, banks should be really scared of an experienced technology company,”
Indeed, users in many countries were financial services are scarce or inefficient, users could start using Facebook’s GlobalCoin or other similar proposals that would replace the role that banks play on their communities.