Facebook planning to launch its own currency

NZ Herald

3 May, 2019 12:12 AM2 mins to read

Facebook CEO Mark Zuckerberg speaks during the F8 Facebook Developers conference on April 30, 2019 in San Jose, California. Photo / Getty.

Facebook plans to leverage its huge size to launch a cryptocurrency-based payment system, according to a the Wall Street Journal.

While the social network has yet to offer any official comment, the evidence is starting to mount up.

Bloomberg News reported in December that Facebook was working on a digital coin that users of its WhatsApp messaging service could use to transfer money, with a focus on overseas remittances.

And The New York Times said in February that the company was seeking to raise as much as US$1 billion ($1.5b) for the project.

Facebook is recruiting dozens of financial firms and online merchants to help with its launch, the Journal says.

Does that mean they’ll need to verify everyone’s identity to comply with AML? pic.twitter.com/UvUpFwqYsz
— CJ (@CJ_NZ) May 3, 2019

At the heart of the initiative, under way for more than a year and code-named Project Libra, is a digital coin that its users could send to each other and use to make purchases both on Facebook and across the internet, the paper says, quoting unnamed sources close to the initiative.

One idea said to be under discussion is that Facebook pay users fractions of a coin when they view ads, interact with other content or shop on its platform. The concept is that it would up engagement and help defray criticism that bots, not humans, click on a lot of ads.

The best-case scenario would be that Facebook would bring cryptocurrency to the mainstream, and disrupt traditional players in areas such as international remittances.

The worst-case would be that the heat Facebook is currently generating from regulators on the privacy front would amplify attention from financial regulators, potentially complicating a launch.

And if Facebook is fined up to US$5b by the FTC for privacy violations, as it anticipates, then maybe it could try paying the fine in its currency.