Cryptocurrency

Is Facebook Creating Its Own Cryptocurrency?

Is Facebook secretly looking into creating its own cryptocurrency? With the recent move by Mark Zuckerberg to create an exploratory blockchain group inside of Facebook, reversed ban on cryptocurrency adverts & the spreading rumors of its interest in Coinbase onlookers might say it’s promising.   

Facebook has reversed its controversial ban on cryptocurrency adverts, prompting further speculation that the tech giant may be planning something major in the space.

The lifting of the ban – put in place in January amid fears that ads were used for fraud – was welcomed by industry figures, with some saying that it indicated the firm’s recognition of the potential of bitcoin and other cryptocurrencies.

“Customer safety and education about the market should remain a priority, but a blanket ban is a poor approach to new ideas,” Iqbal Gandham, the UK managing director of the eToro investment platform told The Independent. “Technology giants like Facebook are aware of the potential of blockchain technology to fundamentally change the financial system.”

But perhaps more significant than the immediate implications for cryptocurrency firms is what the move signals about Facebook’s own ambitions.

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Last month, the social network announced its biggest ever management reshuffle, which included the launch of an exploratory blockchain group that reports directly to the company’s CTO, Mike Schroepfer.

At the head of the group is David Marcus, the former head of Facebook Messenger and a board member of Coinbase – one of the world’s most popular cryptocurrency exchanges.

Rumours that Facebook is actually interested in buying Coinbase have previously been reported by The Economist, who noted that the lack of an incumbent giant in the crypto space is why major tech firms are joining investors and startups in showing an interest in the industry.

Experts say that not only could the acquisition boost Facebook’s value and utility, the involvement of the technology giant would add legitimacy to cryptocurrency markets.

Related: 6 Surprising Ways Consumers Are Using Cryptocurrencies 

“It wouldn’t surprise me if Facebook made an attempt to acquire Coinbase,” tech entrepreneur Oliver Isaacs told The Independent. “Whether [Coinbase CEO] Brian Armstrong and the team would agree is another question.”

Coinbase did not respond to a request for comment about a potential acquisition but Mr Armstrong has previously stated his firm’s ambitions of seeing cryptocurrency adoption reach a billion people.

“Today we’re serving maybe 10 million customers,” he said in a promotional video for Coinbase in March. “We would like to reach a billion people in the world who are using digital currency on a daily basis.” 

Facebook has more than 2 billion users, meaning any cryptocurrency it introduced could potentially have a greater reach than any single traditional currency.

A Facebook coin would also have a far greater reach than bitcoin or any of the other 1,500 or so cryptocurrencies currently on the market, while also serving as an actual currency rather than simply a store of value or speculative investment.

“If platforms like Google, Twitter and Facebook launched their own cryptocurrency it could be huge because of the user base,” Phillip Nunn, CEO of Manchester-based investment firm Blackmore Group, told The Independent.

Facebook also declined to comment about rumours of a Coinbase takeover or its interest in cryptocurrency, with a spokesperson referring instead to a post by Mark Zuckerberg published in January in which he discusses the potential of decentralised currencies and other technologies.

“One of the most interesting questions in technology right now is about centralisation vs decentralisation,” Zuckerberg wrote. “With the rise of a small number of big tech companies… many people now believe technology only centralises power rather than decentralises it.

“There are important counter-trends to this – like encryption and cryptocurrency – that take power from centralised systems and put it back into people’s hands.”

The Facebook founder concluded the post by saying he was “interested to go deeper” with these technologies and figure out “how best to use them” through Facebook’s platform. 

Source
Independent
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