The Combination of Facebook and Cryptocurrency in the Mobile Payments Space
It would not be out of line to say that 2018 was a bad year for Facebook. Some reports would call that understatement on par with suggesting that it’s a mite warm on the surface of the sun. Between the Cambridge Analytics mess, the Russian election mess, and the hot mess that was Zuckerberg in front of Congress, it’s easy to see why some were concerned. Now, with many tech funds looking to replace the F in FANG stocks with Visa or PayPal, potentially, Facebook desperately needs a win. That win may come around with help from cryptocurrency.
Amid the horrors of 2018, Facebook quietly began laying the groundwork for doing something with its enormous mass of lookie-loos and people who post pictures about anything. That something was an in-house startup focused on blockchain operations and cryptocurrency, which would be run by its current head of Facebook Messenger and the former president of PayPal, David Marcus. Details that have emerged have been sketchy so far—employees are reportedly required to sign non-disclosure agreements before even starting in—but what has emerged so far is noteworthy.
Facebook recently rolled out its own stablecoin, a coin that’s pegged to a resource like the dollar. In this case, Facebook’s coin is geared toward remittances in India, and will arrive on WhatsApp first. With over 200 million total users in India, even a small percentage using the service occasionally will represent hefty gains for Facebook.
Gains it could badly use. Right now, much of Facebook’s revenue comes an advertising model that, as we know, has been on the decline for years. With the advent of ad-blocking systems, as well as a lot of negative press surrounding the gathering of data used for analytics purposes, the end result is that advertising is shaky at best. A move to take advantage of cryptocurrency for peer-to-peer payments, or for outright shopping—let’s remember that social media is a leg in the stool that is omnichannel operations—and the end result is a very real possibility for new income.
Considering, however, the weight of bad press Facebook is currently under by at least some reckonings, this approach may not prove useful in the end. Only time, however, will determine just what side all the potential customers end up on.