Recently, it has been revealed that Facebook CEO, Mark Zuckerberg is now working on its own cryptocurrency that will be integrated into three of its most popular apps viz. Whatsapp, Instagram, and Messenger that has more than 2.7 billion users worldwide.
According to the insider sources, Facebook is focusing on developing a stablecoin for its users to send money to their contacts through Whatsapp. However, it won’t be limited to only US dollar rather pegged to different foreign currencies. The value of the new coin will be guaranteed through a backing with funds in FB’s bank accounts.
The project that is being kept under wraps is expected to launch in the first half of this year, with a team of 50 engineers dedicatedly working on it.
Crypto world is anticipating how exactly this stablecoin of Facebook will play out. Meanwhile, the social media giant is already pitching it stablecoin to various cryptocurrency exchanges so that converting them into fiat currency would be possible with just a few clicks.
Best Innovation Happens in “Winters”
The impact of this stablecoin can’t be predicted yet, however, according to Gavin Baker, the former portfolio manager at Fidelity OTC fund this could be a threat to Visa and Mastercard.
This would be “powerful” for Facebook making it close to WeChat level, which FB is “fundamentally after – Wechat envy is real!”
1) $FB’s stablecoin will likely be the first serious threat to $V and $MA since Dodd/Frank. Especially as $FB doesn’t need to monetize via a processing fee. $FB can – and perhaps should – treat the stablecoin solely as a moat/driver for their existing ad business,
— Gavin Baker (@GavinSBaker) March 5, 2019
“$FB’s stablecoin will likely be the first serious threat to $V and $MA since Dodd/Frank. Especially as FB doesn’t need to monetize via a processing fee. FB can – and perhaps should – treat the stablecoin solely as a moat/driver for their existing ad business.”
FB stablecoin would also help grow its advertising business and the more engagement, the more monetization.
With all the “off-the-record comments” about remittances, he says they could start with it and then move to their Facebook and Instagram marketplace as Zuckerberg had stated about increasing commerce “there’s also a very big opportunity in basically enabling the transactions,” on Instagram, Facebook and WhatsApp,
“Come for the tool, stay for the network, never leave because of the utility” to once more paraphrase @cdixon. This makes the FB stablecoin even more of a potential threat to $V and $MA.”
Once Facebook manages to make its stablecoin front and center in the checkout flow either through, 1-2 percent discount or with a loyalty program to end all loyalty programs via FB stablecoin, other giants like Amazon and Google will soon follow.
“The best innovation generally happens in “winters.” i.e. GOOGLE, CRM came out of the post 2000 bubble tech winter (altho founded pre 2000, they really scaled after the bubble burst). Crypto is in its own “winter” and the most foundational innovation is likely happening now.”
He believes it is unlikely that Facebook stablecoin will run on existing rails, nevertheless, it is focused on stablecoin/payments as a way in order to create more utility for its products.