Facebook’s Blockchain and Crypto Year: How the Social Network Changed Opinions During 2018
Facebook has been changing opinion about the virtual currency market and blockchain technology over 2018. A few days ago, Bloomberg informed that the company is going to be creating a stablecoin and target the Indian market for transactions between individuals.
This is something that seems to challenge Facebook’s opinion earlier this year when it banned all crypto ads on its social network. However, the company decided to partly reverse it in June trying to include just some approved content.
The first months were somehow erratic for Facebook. At the beginning of January, Mark Zuckerberg wrote one of his personal challenges for 2018 in which he said that he was interested in studying positive and negative aspects of cryptocurrencies and blockchain technology.
However, just a few weeks later, Facebook announced that it was going to be prohibiting ads that were misleading or deceptive. This ban included Initial Coin Offerings (ICOs) among other financial products that tend to have a lot of fraudsters.
Back in December, the U.S. Securities and Exchange Commission (SEC) chairman, Jay Clayton suggested that there were several ICOs that were just fraudulent schemes or just scams. Between 2017 and 2018, ICOs started to grow in popularity raising several millions of dollars per month. However, this trend ended a few months ago when there were just a few hundred ICOs launched per month, compared to thousands at the beginning of the year.
After Facebook’s decision to ban ICO and crypto ads on its platform, the crypto market plummeted. Bitcoin went down from $11,200 to $8,800 in just a few days.
Later in February, David Marcus, Facebook’s head of Messenger and Coinbase board member, said that cryptocurrencies would not appear on Facebook anytime soon. The main reason behind this decision was related to scalability concerns.
On the matter, he commented:
“Payments using crypto right now is just very expensive, super slow, so the various communities running the different blockchains and the different assets need to fix all the issues, and then when we get there someday, maybe we’ll do something.”
He went on saying that the crypto ad ban aimed at protecting the community from fraudulent companies and scams. However, he explained that if the community self-regulated itself they could review their decision and lift the ban.
Between February and May, there were no important events, as Cointelegraph reports. In May the company decided to set up a blockchain group that was going to be investigating possible applications of blockchain technology. David Marcus was selected as the head of this group.
According to some reports, the company was also planning to launch a virtual currency that could be used by its 2 billion users. However, the company did not provide information on the matter.
In June, Facebook took the decision to lift the ban on virtual currency-related ads. However, Initial Coin Offerings are still banned and would not have the possibility to promote their content. The firm informed that they want to be sure that the content displayed by these ads is safe for users.
Companies that want to advertise on the platform would have to be previously approved by Facebook and provide information about their business. Indeed, the firm informed that not everyone who wants to advertise would receive approval to do so.
Another important thing that happened during this year was Marcus announcement that he was quitting its position on the board of Coinbase that he had since December 2017 when Bitcoin was reaching $20,000. He explained that because of the new group that he is heading at Facebook related to blockchain technology, he would prefer to be focused solely on Facebook. The intention was to avoid the appearance of conflict.
In August, the company has also been reportedly working with Stellar Lumens (XLM) one of the largest blockchain networks in the space. It seemed that the intention was to build a Facebook variant of the Stellar blockchain. However, this was something that was denied by Facebook. They informed that they were not engaged in any discussion with Stellar.
Now, in December, the latest rumours are related to Facebook trying to launch its own stablecoin. The intention is to launch it on its messaging app WhatsApp and provide services to the Indian market. India is an important country for remittances, and Facebook seemed interested in offering solutions to individuals in the country.
At the same time, the blockchain team is working in things that people do not have now but could have in the future. This could be related to financial services, innovative ways to save or different ways to share information.
WhatsApp has reportedly around 200 million users and according to data provided by the World Bank, the country received $69 billion in remittances in 2017. This is equal to 2.8 percent of the GDP of India.
Apparently, the virtual currency that the company might launch is going to be a stablecoin, reducing volatility and allowing users to know that their funds will always be worth what they expected them to be.
A Bloomberg report on the matter reads as follows:
“Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications. We don’t have anything further to share.”
This statement provided by the company is the same that it provided back in May when rumours related to is virtual currency emerged.
Finally, the company was also searching at the beginning of December for new blockchain-related specialists to work on Facebook. However, these positions have been already taken and with the exception of Business Development Lead.
Clearly, 2018 has been a strange year for the company. In one hand, Zuckerberg showed himself very open towards blockchain and virtual currencies. Additionally, there were several rumours related to the company working in a digital currency.
On the other hand, the firm did not confirm anything and imposed a strict ban on crypto companies that wanted to advertise on its platform. Time will only be able to tell what is ahead for Facebook.