Facebook’s Globalcoin is ”Wildly Important” for Crypto But No Threat to Bitcoin

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The past week has seen a flurry of reports detailing Facebook‘s “Globalcoin” – the social media giant’s upcoming cryptocurrency. Now, Galaxy Digital’s CEO Mike Novogratz has offered his take on the rumors surrounding Facebook’s Globalcoin.

Facebook’s Globalcoin will further validate the crypto industry

Novogratz appeared on the popular CNBC segment “Squawk Box” to dissect the potential Facebook cryptocurrency. Toshi Times recently covered how Facebook has reportedly held talks with Coinbase and Gemini, along with other major actors, in preparation for the launch of its cryptocurrency. 

Moreover, Facebook’s Globalcoin is said to be substantially “bigger and more open” than just another Facebook payment method. Additionally, it will also supposedly feature deep integration with WhatsApp, Instagram and Messenger.

Novogratz argued that the mere fact that Facebook is about to launch a cryptocurrency further legitimizes the cryptocurrency industry. 

“Facebook is wildly important for the ecosystem,” Novogratz noted, but went on to claim that Facebook’s Globalcoin will be unable to compete with Bitcoin. Facebook is widely believed to be launching a so-called stablecoin, primarily aimed at easing payments.

However, Novogratz suggested that Bitcoin would increasingly transition towards being a store-of-value. In effect, this would mean that the premier cryptocurrency would become a, quite literal, gold standard for cryptocurrencies.

Globalcoin will not compete with Bitcoin

Facebook’s Globalcoin, on the other hand, would mainly be used for day-to-day payments. Novogratz further highlighted this in the Squawk Box interview:

“Bitcoin is not going to be a payment currency. Bitcoin is going to be a store of value just like gold. We don’t spend gold just on anything – you [CNBC’s interviewer] didn’t buy that tie with gold. It [Bitcoin] is going to be what people perceive as a store of value.”

As such, it seems Novogratz foresees Facebook‘s Globalcoin as driving increased cryptocurrency adoption rather than competing with Bitcoin. This lines up with other comments made by the former Facebook Growth Team member Anthony Pompliano last year.

At the time, Pompliano underlined the importance of Facebook in driving both increased cryptocurrency and blockchain technology adoption. Consequently, Pompliano argued it is of paramount importance for Facebook to create a widely adopted product of this kind.

“If [Facebook] could successfully build the product and drive adoption, they will have a chance to transition from a social network to one of the largest financial services companies in the world.”

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