Last Thursday The Wall Street Journal published new details about Facebook’s plans regarding the imminent creation of its own cryptocurrency. According to reports, the company is looking for business partners, mainly banks, to expand the reach of its blockchain-based market.
Facebook’s idea is that its potential partners invest in an investment fund valued at more than one billion dollars, which will serve as a backup for the Facebook currency and thus be able to mitigate the great speculative changes that make cryptocurrencies such as Bitcoin difficult to use every day.
“I think it should be as easy to send money to someone as to send a picture,” Zuckerberg said when asked. Among other improvements focused on trade, they highlighted a better payment through Instagram, donation stickers and a new tool for small business owners to list items on WhatsApp, which is already being tested in India and will be expanded to other countries this year. The platform, which for now is not blockchain-based, is designed for peer-to-peer payments.
Another possibility that they considered is to integrate it into the ecosystem of Facebook ads. The scheme could work on both sides of the ad equation: merchants could use the coins to pay for the ads and users would be rewarded in coins for viewing or interacting with them. The idea is to keep the currencies of Facebook, and therefore the users, firmly anchored to the platform.
“I don’t think they are doing anything that is not in the service of increasing interactions on their platforms,” says Joshua Gans, a professor at the University of Toronto. But sending money to companies presents a challenge, he says. Compared to friends and family, companies are more likely to get rid of their Facebook money at the end of the month in favor of real money.
Facebook’s foray into blockchain could look a bit like a loyalty point system: tokens that can be earned and spent on Facebook services, so Facebook money would remain within the system. This is not unprecedented among technology companies: Uber, for example, has Uber Cash, which rewards users for purchases both inside and outside Uber with application-specific money.
Would you stop using euros, dollars or pounds to use Facebook money? Like it or not, it’s very close.