On Thursday, May 2, the Wall Street Journal reported that Facebook is secretly working on its cryptocurrency-based payments system. The social media giant is reportedly in talks with several e-commerce companies and financial giants to work on this project.
Since the beginning of 2019, Facebook seems to have accelerated working on its crypto plans. Although the company hasn’t been much vocal about it, different industry sources surely suggest that.
Dubbed as the Project Libra, the report suggests that Facebook is already in talks with payment processing giants Mastercard and Visa. The Facebook Coin is likely to be a stablecoin, pegged by the U.S. Dollar, and underpinned by the blockchain technology. According to the March 2019 report, Facebook plans to launch its cryptocurrency across its own suite of messaging applications.
But it now looks like the company plans to expand its crypto footprint to other e-commerce companies and apps. It means that Facebook is likely to embed its payments to third-party websites and apps. The social media company is reportedly using a two-pronged approach while approaching online merchants. It offers the merchants to invest in Facebook’s crypto platform and join them as a network partner.
Also, another idea proposed is Facebook would be rewarding its users with a fraction of its cryptocurrency for looking at the advertisements. This is a concept similar to that adopted by the Brave browser for its Basic Attention Token.
Facebook currently hosts over 1 million active users on its platforms. This massive size of users will itself provide a huge boost to Project Libra.
Last month, CoinSpeaker reported that Facebook is allegedly seeking $1 billion in investments from its partners for the crypto project. Looking at its massive user-base, Kik CEO believes that the Facebook Coin can replace the U.S. Dollar, let alone Bitcoin.
Zuckerberg Speaks on Privacy
One of the biggest issues concerning Facebook is privacy. In the last one year, Facebook has been named in some of the major scandals involving data breaches and privacy. In a recent backlash, Facebook shareholders asked Zuckerberg to step down from his position of CEO. However, the company management has backed Zuckerberg to continue with the position. Facebook boss Mark Zuckerberg said that the company is taking all steps to ensure data privacy for its users.
By stepping into the crypto land, Facebook is taking a major challenge up its sleeves. The crypto industry is also facing issues of hacks, thefts, and market manipulation. In such circumstances, Facebook needs to solidify its strategy going further.
During the recent F8 conference, Zuckerberg stressed on the matter of privacy. The Facebook CEO also spoke in detail about how e-commerce and payments are the future to the company. He said that bringing e-commerce to Facebook’s several messaging apps could drive brands to spend more on advertising. The company is recently testing an in-app checkout feature on its Instagram platform to bring more convenience to users’ shopping experience.
Banking giant Barclays thinks that Facebook Coin can bring the company an additional $19 billion in revenues. Henry Liu, a former Facebook employee and managing partner of YGC, said: “Payments and commerce are Facebook’s only way out from its freemium, advertisement business model”.