FinTech News
Facebook Reportedly Still Working on Building Its Own Cryptocurrency
For months one of the big rumors has been that Facebook was developing a cryptocurrency that could be used for payments on its platform. While these plans still aren’t confirmed, we are seemingly getting a better idea of what this would look like. According to the Wall Street Journal, Facebook is continuing talks with various potential partners in a bid to achieve e-commerce dominance.
The effort to bring the digital currency to fruition is reportedly being referred to as “Project Libra” within Facebook and finds the social network seeking investments from outside firms. In fact it’s said that the company is looking for $1 billion to help launch the coin. To help raise that, sources say Facebook has held discussions with such players as Visa, Mastercard, and First Data. Apparently these funds would be used to help stabilize the price of the potential coin to help prevent the volatile swings other cryptos such as Bitcoin have famously endured. Beyond their search for funding, Facebook has also been reaching out to various e-commerce sites and apps about accepting their crypto as a form of payment.
Among the many benefits Facebook is pitching with their plan is the ability to entice sellers by offering lower fees. Currently, most e-commerce platforms take 2% to 3% from each sale to cover processing fees and more. However, by cutting out credit card swipe fees, Facebook could provide merchants with better terms that would, in turn, help grow the site’s e-commerce. As for users, Facebook is also said to be looking at plans to pay consumers for viewing ads, making purchases, and more — creating a loyalty program of sorts.
Of course, as WSJ notes, there are a few things working against Facebook and their cryptocurrency dream. For one the company has been regularly scrutinized from multiple sides as of late for everything from privacy to free speech. Furthermore cryptocurrencies haven’t fared much better in the public eye due to hacks, accusations of fraud, etc. As a result it may seem bold for a company staring down regulation to expand into a sector facing its own regulatory issues.
On the other hand the advantages Facebook would enter with aren’t to be understated. With more than 1.5 billion active monthly users, there’s already a strong market for any coin the company cooks up. The Journal also points out that Facebook’s efforts to create a stablecoin backed by fiat currency might also help sway regulators who might otherwise be concerned.
As mentioned Facebook has yet to officially comment on any other these plans, other than to say that they’re “exploring many different applications” of blockchain technology. Despite that this seems like one rumor that will only grow louder in the coming months. Given the size of Facebook’s reach, the impact a proprietary coin could have on e-commerce and cryptocurrency adoption is huge. Now the only question is, will it happen?
