- The Financial Times first reported that Facebook's parent company is pursuing non-blockchain-based digital currencies as a way to expand into ecommerce in the "least regulated way" possible, given past difficulties with crypto efforts Libra/Diem.
- It's reported that Meta intends to focus on launching digital tokens within its apps and proprietary metaverse to move into ecommerce to offset Meta ad losses. One such test token was reportedly dubbed "Zuck Bucks" after founder Mark Zuckerberg.
- However, Meta is keeping its options open as it made several crypto-related trademark filings last month for crypto tokens, blockchain software, and virtual currency exchanges.
- A Meta spokesperson replied to a comment inquiry stating, "We have no updates to share today. We continuously consider new product innovations for people, businesses, and creators. As a company, we are focused on building for the metaverse and that includes what payments and financial services might look like."
Meta Platforms continues to explore ways to try and expand into ecommerce with non-blockchain tokens named after founder Mark Zuckerberg as Facebook growth stalls.
On Wednesday, the Financial Times first reported that Facebook's parent company -- Meta -- is pursuing non-blockchain-based digital currencies as a way to expand into ecommerce using the "least regulated way" possible, in light of the company's past crypto failures of Libra and Diem respectively. The article was based on a cache of internal memos and anonymous interviews.
In February, Meta Platforms suffered the largest valuation drop in U.S. stock market history, as Meta's stock price fell 26%, wiping out more than $250 billion in market capitalization in a single day. The company cited steep declines in Facebook, Instagram, and WhatsApp advertising revenue due to fierce competition from competitors such as TikTok, YouTube, and WeChat.
The FT article reports that Meta intends to focus on launching non-crypto digital tokens and "creator coins" as rewards to content innovators within its apps and proprietary metaverse to move into ecommerce to help offset ad losses. One such test token was reportedly dubbed "Zuck Bucks" after founder Mark Zuckerberg. It's likely that Meta is testing non-crypto virtual currency options to avoid backlash from U.S. regulators who have consistently opposed Facebook/Meta's attempts to move into digital money in the past.
A Meta spokesperson replied to my email inquiry today seeking comment regarding the company's ecommerce strategy stating, "We have no updates to share today. We continuously consider new product innovations for people, businesses, and creators. As a company, we are focused on building for the metaverse and that includes what payments and financial services might look like."
Facebook/Meta's past crypto efforts have faced challenges
Last October, before changing its name to Meta, Facebook announced a strategic collaboration with popular cryptocurrency trading exchange Coinbase in a pilot project to offer Facebook's own digital wallet -- called Novi -- to users in certain geographies.
That Novi deal was a watered down iteration of Facebook's first foray into crypto with its announced plans for a Libra token, which were made public in 2019. However, the Libra concept triggered bipartisan blowback from U.S. lawmakers and central banking leaders, who asserted that the social network's 2.9 billion user base constituted a population larger than China and India combined. Officials were afraid the Libra currency would be widely adopted quickly, potentially decimating monetary systems and small country currencies. In response, Facebook completely reconfigured Libra and removed itself from project oversight, which created an "independent" currency renamed Diem that was separate from Facebook and its Novi wallet.
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But that changeup wasn't enough for U.S. senators who blasted the Coinbase-Novi teamup, writing directly to Zuckerberg calling on him to immediately abandon the crypto efforts. "Given the scope of the scandals surrounding your company, we write to voice our strongest opposition to Facebook's revived effort to launch a cryptocurrency and digital wallet, now branded 'Diem' and 'Novi,' respectively," the senators' letter stated.
The company's cryptocurrency efforts have continued to wither with the resignation of Novi leader David Marcus in November 2021, and the company's decision in January 2022 to sell its remaining stake in the Diem project completely, as well as a "mass exodus" of crypto developers since then according to the FT.
However, Meta seems to be keeping its blockchain and crypto options open as it made several crypto-related trademark filings last month for crypto tokens, blockchain software, virtual currency exchanges, as well as financial and currency trading services. It will be worth keeping an eye on the tech titan's future crypto moves.
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