Anonymous sources, abnormal wording, incomplete details – this is, in a nutshell, the Facebook-to-launch-a-crypto piece published by Bloomberg this week. The story has all the hallmarks of an inherently flaky news item adorned with some trimmings to maximise clickbaitiness in an era where journalists’ salaries depend as much on their ability to attract online audiences as they do on producing quality content.
However, since we do have an interesting story published by two seemingly credible journalists working for a generally credible news desk, it is worth exploring the subject a bit further.
Firstly, if Facebook does launch its own crypto, we can more or less assume with complete confidence that it will be issued from its own private blockchain – in other words, expect FBCoin to be a crypto that remains entirely sandboxed within the Facebook eco-system, not a public blockchain-issued crypto like Bitcoin or Stellar that can be traded on Binance, for example.
Secondly, according to the Bloomberg story, the crypto that is being envisaged is a stable-coin that will facilitate – in its first iteration, at least – remittance payments over WhatsApp by India’s diaspora to family back home.
In other words, there is no guarantee that FBCoin will be a crypto that users will ever see, much less actively acquire or trade with via Facebook and/or Whatsapp. Facebook could simply expose traditional currencies on the front-end (USD to Rupee conversions, say) and let its blockchain back-end take care of the intermediate fiat-crypto pairings that facilitate the transaction.
As the legislative terrain for cryptos in the US remains unclear – and that is no less the case for stable-coin cryptos – there is a strong argument for stating that the most likely path that will be taken by Facebook’s blockchain development team is to create a crypto that is entirely invisible to the public, if it creates one at all.
In the end, Bloomberg’s Facebook Crypto story seems to suggest – bearing in mind that it’s likely that no firm decisions have been made at all at this stage by Facebook in regards to anything on this matter – to the development of a cross-border payments platform.
This would allow FB to bypass the fees of established international payments processors, and use its ready-made one billion WhatsApp audience as the basis for becoming the world’s leading remittance payments platform. That vision would be more in line with emerging blockchain-based cross-border payment solutions like xRapid where end users never need to see much less know anything about crypto.
As a crypto story, the Bloomberg item arguably carries no interest for the wider crypto community, but it could represent an interesting development for the remittances industry, and particularly for companies like Western Union who may just see their exorbitant fees – charged to some of the poorest and hardest-working people on the planet – finally challenged by the blockchain (expected), albeit from Facebook (unexpected).