In 2004, Mark Zuckerberg faced a high-profile lawsuit from Cameron and Tyler Winklevoss, who accused him of stealing their social networking concept. The dispute ended with a $65 million settlement. Now, years later, these former adversaries have found a new common interest: cryptocurrency.
According to reports, Zuckerberg has held meetings with the Winklevoss twins as part of Facebook's efforts to develop its own digital currency. This unexpected collaboration highlights how past rivals can realign when business goals converge.
Facebook’s Ambitious Cryptocurrency Plans
Facebook is actively developing a digital currency, internally referred to as GlobalCoin. The company plans to begin testing the currency soon, with the goal of establishing a digital payments system across a dozen countries by the first quarter of 2020.
To bring this ambitious project to life, Zuckerberg has engaged with several key figures and organizations in the financial and crypto sectors. This includes a meeting with Mark Carney, the Governor of the Bank of England, in April 2019.
The Winklevoss Brothers and Gemini Exchange
The Winklevoss twins are the founders of Gemini, a regulated cryptocurrency exchange. Their Gemini dollar (GUSD) is a stablecoin approved by the New York State Department of Financial Services, enabling blockchain-based transactions pegged to the US dollar.
Their expertise in operating a compliant crypto platform made them valuable consultation partners for Facebook's project. The meetings signify a pragmatic move by Zuckerberg to leverage their experience in the regulated digital asset space.
Secrecy and Strategic Moves by Facebook
Facebook is executing its cryptocurrency strategy under extreme secrecy. Access to the project's offices is reportedly restricted to core team members only, underscoring the initiative's high priority.
The company has also made key personnel changes. David Marcus, a former PayPal president who was leading Facebook's messaging products, was moved to head the blockchain division. Marcus has been a long-time proponent of digital currencies, believing they represent the future of financial transactions.
Furthermore, Facebook acquired Chainspace, a company specializing in smart contract technology. This acquisition provides the foundational tech needed to build a stablecoin—a cryptocurrency likely pegged to the US dollar or a basket of fiat currencies. The primary use case is expected to be peer-to-peer payments through WhatsApp.
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Frequently Asked Questions
Why did Mark Zuckerberg meet with the Winklevoss twins?
Zuckerberg met with the Winklevoss brothers to discuss their experience in running a regulated cryptocurrency exchange, Gemini. Their insights are valuable for Facebook's own development of a compliant global digital currency.
What is Facebook’s GlobalCoin?
GlobalCoin is the internal code name for Facebook’s proposed cryptocurrency. It is designed to be a stablecoin, meaning its value will be pegged to traditional currencies like the US dollar to minimize volatility. The goal is to enable payments within apps like WhatsApp.
What is the significance of the Gemini dollar in this context?
The Gemini dollar (GUSD) is one of the first regulated stablecoins in the United States. Its operational framework and regulatory compliance provide a proven model that Facebook likely studied for its own currency project, making the twins' expertise highly relevant.
How does Facebook plan to ensure the success of its cryptocurrency?
Beyond consulting experts, Facebook is building a dedicated team, acquiring necessary technology like Chainspace, and engaging with global financial regulators. The aim is to create a secure, scalable, and widely accepted digital payment system for its massive user base.
Will this cryptocurrency be available to all Facebook users?
Initial reports suggest a phased rollout, starting with a test in a dozen countries. The long-term vision is to create a global digital currency for use across Facebook's family of applications, including WhatsApp and Instagram, for everyday transactions.