It’s all but officially confirmed that Facebook is working on its own cryptocurrency stablecoin. Details are few and far between, with clarification needed on whether it uses an existing proprietary network or its own ‘in-house’ technology. What we can be certain of is that the company will utilize its WhatsApp messaging service and social media platform to turbo-boost adoption. Moreover, Facebook is said to be initially targeting the remittance markets of India, before a more global rollout. With over 40 people linked to its blockchain group, the launch of this mysterious stablecoin is likely slated for sometime in 2019. A quote from the company stated:
“Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology,” a company spokesman said in a statement. “This new small team is exploring many different applications. We don’t have anything further to share.”
So, What About Bitcoin?
Most importantly, what does this mean for the existing and growing world of cryptocurrencies and Bitcoin in particular? Well, it all very much depends on what form this private stablecoin takes. What we’re really interested in is interoperability. Will said FacebookCoin (FaceCoin?) be exchangeable for other digital currencies? Or will it belong inside a permissioned blockchain, a la a fenced hyperledger style network? If it’s the former and can be transmitted on a public network, then it may (emphasis on may) start a major bull run.
It doesn’t take a fortune teller to predict that mass-adoption is all but guaranteed if Facebook launches their own interoperable digital currency. Masters of user engagement and user interfaces, the process of buying and exchanging said coin will probably be the easiest in the industry. ‘No coiners’ will suddenly have access to the digital world – and you can bet Facebook would like a significant slice of the new digital pie.
But what if it’s a private chain, focusing taking over the DLT remittance market by storm?
An American Coup
This is where things get murky and mean. If Facebook isn’t bothered (read, aggressive takeover) about interoperability, then it’s likely it wants the new digital remittance markets all to itself. Plans to take over developing nations internet services, and thereby profiting in unimaginably enormous ways, would neatly fit with a dominant foray into remittance markets too. What would be the point of any other cryptocurrency if you could log into your Facebook account and send money to anyone in the world, for free, at the touch of a button?
It’s Not All Doom and Gloom
How likely either scenario probably depends on your general life outlook and cynicism. Whilst the second scenario, of a bespoke, fenced Facebook coin and network, would certainly be problematic for many existing cryptocurrency projects, it would unlikely spell the end for the whole ecosystem. Bitcoin and a handful of other currencies would still have enough unique value propositions to justify their existence. Moreover – Facebook would be shortsighted to miss out on the potential digital currency exchange and trading boom/marketplace.
So what does a ‘FaceCoin’ mean for Bitcoin? In short, mixed. On balance, it’s probably still net-positive. What it does show, however, is that this ecosystem will have plenty of surprises left before the end of 2019 and that nothing is guaranteed.