Facebook is launching its own currency.
Facebook, how much you are becoming a country.
If Facebook was a country it would already be the most populous one in the world (2.3 billion active users – you’ll find plenty of news stories out there saying it’s the third largest, but those are based on 2012 numbers, when Facebook broke the 1 billion user limit).
Financially, Facebook drives a level of revenue that bests many countries, and as a political power factor it is definitely a force to be reckoned with.
And speaking of finances, it seems Zuckerberg is making one more move towards going full-on Zuckatopia: launching a Facebook currency. This hardly comes as a surprise, as many have expected Facebook to make a move in payments since they hired former PayPal president David Marcus to run their Blockchain initiatives. Marcus is also on the board of Coinbase.
Now, Zuckerberg has been meeting with the heads of the national banks of both the US and the UK, and has announced that the currency itself will launch in 2020.
Is this good or bad news? For cryptocurrency and it’s users, it’s both. Having a major player coming into crypto will definitely help legitamize it to the hoards of people who have not jumped on the band wagon either for ideological reasons, or due to greed during Bitcoin’s wild appreciations a few years back. And Zuckerberg’s plan to peg the currency to established currencies like the dollar, the euro, and the yen can help bring about some of the stability that is needed if crypto is become an actual, useful means of day-to-day payments, rather than an investment vehicle for online day traders. If you’re getting paid in national currencies, as most of us are, paying in Bitcoin is tricky is it’s value can multiply or be decimated from one day to the next. Essentially, traders want volatility, users want stability.
Handling payments through Facebook or Whatsapp can greatly help make payments easier, especially across borders or in areas where digital and financial infrastructure is lacking. This can help people in developing countries build small businesses and move away from the vulnerability of a cash-based economy (and yes, many of these people do use Facebook and Whatsapp).
From a data perspective, putting all your transactions into the hands of a data hoarder like Facebook is a bit worrying. Not that there’s an immediate reason to fear the data safety of Facebook’s offering, but it is nonetheless another stream of data that Zuckerberg and co. can collect about us.
For Facebook, it’s an obvious move, though. With their infrastructure and usage, they are an automatic market leader in the field right from launch (in access at least, adoption remains to be seen). And with competitors like China’s WeChat Pay and AliPay, and even homegrown competitors like Apple making new moves in the monetary transaction area with the Apple Card, a cryptocurrency is a natural move.
Now, all they need are their own nukes.
Thomas Grønfeldt Senger 