Facebook Crypto Payments Solution Seeks $1 Billion Investment
Project Libra is more far reaching than just Blockchain
Facebook wants to use a stablecoin to monetize WhatsApp and they are seeking up to $1 Billion from investors. The Wall Street Journal most recently reported this angle.
Facebook thinks the project — code-named Project Libra — which it has been working on for more than one year, could allow the company’s own digital coin that users could send to each other, as well as use to make online purchases. The Face Coin would therefore have ubiquitous utility.
Facebook doesn’t have a great track record with building stuff, and I personally think it could eventually acquire Coin Base as its next super app behind its encrypted privacy architecture. This would be aligned with its usual strategy of innovating by acquisition and reproducing the creative concepts of others.
Can Facebook be a Payments Company?
You don’t really have to innovate when you have 2 billion global users. If Facebook’s stablecoin works out right, it will work across websites and not just on Facebook. Facebook in that case would be able to rival Apple Pay with its stablecoin. That’s in essence, the start of a massive token economy where stablecoins are likely to dominate, not volatile like Bitcoin altcoins.
Facebook has been aggressively pursuing Project Libra, having met with dozens of potential investors, including Visa and MasterCard, as well as payment processor First Data, to raise funding that would underpin the value of the coin.
- This method would enable Facebook’s coin to hopefully avoid the price swings that other cryptos, including bitcoin, have faced in recent months.
- Facebook’s blockchain plans could connect its product timeline for both Instagram and WhatsApp.
- Facebook’s approach to stablecoins is truly an alternative reality of digital payments that could threaten the likes of PayPal, Square, Apple, Stripe, Ethereum, Bitcoin and dozens of other companies.
Facebook is is reportedly developing a checkout option that would allow consumers to use their Facebook log-in credentials as a payment method when shopping on the site or with other online merchants.
This would be a more seamless E-commerce experience, just as recently Instagram Checkout has facilitated a method for Instagram to enable shopping in-app with less friction.
Facebook Will Provide Incentives for Attention to Ads with its Face Coin
Facebook is also considering “rewarding” users with fractions of a coin in return for viewing ads, interacting with content or shopping on the platform. Project Libra could thus lead to an alternative version of how crypto interacts with advertising.
Facebook is said to be seeking to raise as much as a billion dollars in outside funding for its cryptocurrency project. Thus it’s seeking new revenue sources for its trending apps, WhatsApp and Instagram, even as it pivots its strategy for its flagship app and Messenger merging with a central encrypted chat product.
Facebook has been developing its own stablecoin for money transfers over WhatsApp, as revealed last December. The stablecoin may be pegged to a “basket of foreign currencies held in bank accounts”. This will essentially be the first global universal stablecoin (GUS).
In the meantime, Facebook is attempting to lure stakeholders to join the project. Project Libra is getting a lot of hype now as the vision for the future of stablecoins becomes clearer.
As for merchants, Facebook is offering cheaper fees than the typical card processing costs that merchants pay on transactions. It is also working on a system where users could click ads to buy a product and pay with Facebook tokens, and then the retailer would be able to recycle those tokens to pay for more ads.
Facebook’s stablecoin, it appears, will thus be advertising centric. This is not a concept your general cryptocurrency audience is going to easily fathom the implications of. Facebook likely doesn’t even need the cash. Involving outside investors in the stablecoin project could help Facebook present the cryptocurrency project as “more decentralized and less controlled” by itself while creating the business B2B partnerships necessary for mass adoption to take place across channels.
Project Libra could indeed threaten Apple Pay, if stablecoins have their way with us. Last month, plans surfaced that Draper, who is a well-known bitcoin (BTC) bull and supporter of altcoin Tezos (XTZ), would meet with Facebook to discuss investment options. Project Libra is likely further in the works than we realize. Facebook’s fiat based stablecoin could essentially also disrupt the entire concept of cryptocurrencies as we knew them circa 2017.