A month after the massive data scandal at Facebook, the social media giant underwent its largest-ever management reshuffle, with WhatsApp, Messenger and its core platform acquiring fresh leadership.
One of the most interesting moves in this shakeup, however, was former Messenger head David Marcus, former president of PayPal, forming a brand new ‘exploratory blockchain’ group under CTO Mike Schroepfer. The creation of this new division was a positive note for many enthusiasts who view blockchain tech as possible solutions to some of the biggest problems facing social media today.
The company has been vague about the purpose of the team, saying only: “Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology.”
Previously, David Marcus voiced his skepticism about the state of cryptocurrencies, noting: “Payments using crypto right now is just very expensive, super slow, so the various communities running the different blockchains and the different assets need to fix all the issues, and then when we get there someday, maybe we’ll do something.”
Now, many publications are speculating on the possibility that Facebook could be preparing to launch its own cryptocurrency to facilitate in-app payments and transfers.
And it kind of makes sense.
Payments Apps and Crypto Rumors
The social media giant has long-struggled to get a real payments system off the ground. Its in-messenger money transfer option has received less than positive feedback, with functionality and availability crippling its adoption. In fact, the majority of the world doesn’t even know that it’s possible to send money over Facebook. And those who have used it have been met with incredibly slow transfer times and strict limitations.
WhatsApp too, the supposed WeChat rival, has struggled to roll out its payments functionality, with delays in its freshman market, India, riddled with regulatory hurdles and government backlash.
Whether a Facecoin or Booktoken could help solve these problems is up for debate, but the rumor of a Facebook-sponsored cryptocurrency does appear to have legs, at least in tech news.
Especially now, with brand new, potentially game changing gossip floating through the media.
Originally published in The Economist, suspicions arose that Facebook could be considering the purchase of one of the world’s largest bitcoin exchanges, Coinbase. And following Facebook’s out-of-nowhere reversal on its crypto ad ban, other media platforms revitalized this rumor. Even Weiss Ratings jumped on board:
— Weiss Ratings (@WeissRatings) June 27, 2018
Oliver Isaacs, a crypto investor and tech entrepreneur, told The ndependent: “It wouldn’t surprise me if Facebook made an attempt to acquire Coinbase,” adding “Whether [Coinbase CEO] Brian Armstrong and the team would agree is another question.”
Though neither party has confirmed or denied the possibility of a takeover, the idea does raise some interesting questions.
Currently, Coinbase boasts over 33 million visits per month, but opening the door to Facebook’s 2 billion users, or WhatsApp’s 1 billion users, could have a tremendous impact on crypto markets.
Coinbase itself has already been making moves to legitimize itself, announcing its own acquisition of Keystone Capital, a financial services firm, which would allow the exchange to operate as a licensed securities broker.
The SEC, crypto mega-mergers and the future of the crypto
With the SEC finally beginning to relax invasive regulations and establish clear rules for the blockchain space, startups and established crypto companies are beginning to make some especially noteworthy moves in an effort to expand their financial offerings.
But it’s the M&A side of things where the space is being shaped. Whether it’s regulated financial firms purchasing crypto startups or crypto startups buying established financial firms, a new game is afoot.
And if the rumors are true, Facebook’s acquisition of Coinbase would undoubtedly have a major impact on the crypto-sphere, for better or worse.
In January 2017, Mark Zuckerberg noted:
“One of the most interesting questions in technology right now is about centralization vs decentralization. A lot of us got into technology because we believe it can be a decentralizing force that puts more power in people’s hands.”
Though an inspiring message, it is still the same guy who launched the world’s largest social network with this sentiment:
“I have over 4,000 emails, pictures, addresses, SNS. People just submitted it. I don’t know why. They ‘trust me’. Dumb fucks.”
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