How Facebook's Name Change to Meta Could Mask Its Crypto Ambitions
The social media giant is publicly shifting its name and focus -- while quietly staking a significant claim in crypto and digital assets.
- Facebook's news is bigger than a name change, but rather is a game changer for its Novi digital wallet.
- Novi will be the digital interface for all digital assets including cryptocurrencies within Meta's plans to create an immersive experience online.
Facebook has changed its corporate name to "Meta" -- which means "beyond" in Latin -- and will soon swap its NASDAQ stock symbol from the familiar FB to MVSE. It's important to note that these types of branding switcheroos happen frequently: Google switched to Alphabet; smoking giant Philip Morris switched to Altria; disgraced Valeant Pharmaceutical switched to Bausch+; oil titan BP switched to Beyond Petroleum; and so on and so forth. Company name changes and rebranding are not uncommon.
Why Facebook made the change
In his founder's letter, Facebook CEO...er….Meta CEO, Mark Zuckerberg said they created the umbrella brand because the Facebook brand had become too scandal damaged, or to put another way, too constraining. "Right now our brand is so tightly linked to one product that it can't possibly represent everything we're doing today, let alone in the future. Over time, I hope we are seen as a metaverse company, and I want to anchor our work and our identity on what we're building towards" wrote Zuckerberg.
In all fairness, Meta is more than the Facebook concept Zuckerberg first founded. Meta also owns the following five other branded assets:
- WhatsApp -- mobile messaging app
- Oculus VR -- virtual reality technology leader
- Onavo -- mobile web analytics provider
- Beluga -- messenger service
- Instagram -- photo and video sharing app
In all seriousness, this corporate rebranding was overdue, it makes sense, and will no doubt be dissected and discussed for weeks to come. However, one point that hasn't gotten a ton of attention is Zuckerberg's throwaway reference to cryptocurrency. "Privacy and safety need to be built into the metaverse from day one. So do open standards and interoperability. This will require not just novel technical work -- like supporting crypto and NFT projects in the community -- but also new forms of governance," Zuckerberg wrote in his letter.
Meta wants to be in crypto
Whether its ambitions are to be a force in the crypto space or simply to mimic the success of the Winklevoss twins who founded the widely popular Gemini crypto exchange, Meta wants in on crypto.
For instance, earlier this month Facebook announced its collaboration with Coinbase in a pilot project to offer Facebook's own digital wallet called Novi to users in certain geographies. The stated goal of the test is to soft launch Facebook's ability to enable users to send and receive a crypto stablecoin, called Pax dollars, abroad instantly, securely, and with no transaction fees.
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This is a much scaled down version of Facebook's attempted, and failed, crypto launch of its own Libra token in 2019 that was scrapped following robust rebuke from central banks and policymakers. The central banks complained -- perhaps rightly so -- that Libra would be adopted as a quasi-sovereign currency in poorer countries. Libra has since been completely rejiggered, renamed Diem, and removed from Facebook's direct oversight or management.
However, a group of U.S. senators voraciously attacked this new Novi project, and wrote to Zuckerberg telling him to shut it down. "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.
Facebook's Novi wallet will be big in Meta's crypto future
Despite that senatorial slapdown, the executive leading Meta's Novi digital wallet project -- David Marcus -- made a series of surprising tweets about the role Novi will play going forward. "Today with Facebook becoming Meta, we're unifying our payments and financial services unit and products under the Novi brand," posted Marcus. "We've been in the business of facilitating payments across our apps for over a decade, and we've processed over $100B in the last 12 months across our products….So over time, we will unify all existing and future payments and financial services experiences under the Novi brand."
To be clear, Meta intends to have one digital wallet that will seemingly work with all digital assets, including cryptocurrencies, within its plans to create an immersive experience online. This is extremely significant but being majorly downplayed. Might all currencies have to be converted to Diem through the Novi wallet before purchases can be made in the Metaverse? How will politicians respond to this? Will politicians even have jurisdiction over the Metaverse?
While there might not be ready answers to these and other questions, it seems that Meta has found its long-awaited answer, and quiet entry, into the digital crypto space. For good or bad, that might be the biggest and most enduring change for Meta.
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