Facebook’s Early Moves
The fact that the world anticipates the introduction of multinational companies into the cryptocurrency business is not new. And the cryptocurrency space is clouded with different speculations concerning the possible companies that will be on the green zone in the coming months, and one of such companies is Facebook. About four years ago, Facebook introduced David Marcus to the public, a former president of PayPal. And in May last year, Marcus became the head of Facebook’s blockchain initiatives. Rumors had it then that the Facebook blockchain initiative comprised of a team that is working on developing a cryptocurrency, to be used for WhatsApp money transfers, with focus on the India remittance market.
2018 and Facebook
Crazy right? I mean, 2018 was like the worst year in Facebook history of existence. With issues like the 2016 US presidential election meddling, the misuse of its social media platform in inciting religious hate and the Cambridge Analytical data breach, 2018 was a year that Facebook’s credibility was questioned. And Facebook lost a whole lot of loyal users, making it plunge into loses that totaled up to 40 Billion USD. When the news came out, Facebook was reached out to, to throw more lights on the issue at hand. Although the team at Facebook initially were vague on the details concerning these rumors, it was even reported that the company had forced the employees in the blockchain division to sign NDAs before they are briefed about the project.
The New Stablecoin
The people at Facebook were probably hiding it so that they will gift it to us as a new year gift. Because just a few days into the new year 2019, the company finally went public with an official announcement of a digital stablecoin that is to be used for remittance payments – just as rumors had it. Let me not leave some stones unturned here, so what are Digital stablecoins? Digital stable coins are cryptocurrencies that are pegged to a stable, popular fiat currency. They were invented to act as a bridge of gap between fiat currencies and crypto coins, thereby addressing the issue of volatility. Facebook’s digital stablecoin, which is pegged to the fiat is to be used in India, and the payments will be functional through WhatsApp. You might want to ask why not make it a global project. But in my opinion, I will say that the strategy that they implemented on this baby project is good. India has the highest number of WhatsApp users, with over 200 million users. And most of these people as I write, are unbanked. So India is rather a good place to start. The details of this project have not been made available, but at most, the little that they have said have answered the question that most people have been asking for a long time. Facebook is creating its own cryptocurrency.
Just as there were rumors prior to the official public statement that they were working on their own crypto coin, analysts have gone back to work on the possibilities that surrounds the future of this coin. The news out there is that India is just the beginning. Facebook looks to be looking diversifying from the revenue model it is currently running which is ad-based. Experienced analysts have proposed the possibility of Facebook leveraging its 2.5 Billion and more users into generating payment based revenue model, kick starting with peer-to-peer payments, there after move into online vendor option. There is also the possibility of implementing the crypto coin that Facebook is working on into a “Pay with Facebook” option. The Facebook digital stablecoin and wallet, if what we have established is to go by is beyond just a mobile commerce platform, but when it is pegged with dollar, it will become relatively more stable when compared to the fiat currency. The possibilities are endless, and I have not considered that of creating an online Facebook bank.
Looking at all these propositions, you will agree with me that Facebook needs to rebuild the trust it lost in 2018. The company is not new to reinvention, and with the amount of smart people that they have recruited over the past one year into their blockchain project, a cryptocurrency project with its own generic coin would indeed be a great reinvention.