According to a New York Times report, Facebook is working on a token that will be used across all Facebook-owned platforms. Same token would be used on Facebook, WhatsApp, and Instagram. The token will be a stablecoin backed by the US dollar and other currencies.
Stablecoin networks need collateral of equivalent value available as deposit or reserve. The concept of stablecoin works very differently than cryptocurrencies like bitcoin. Bitcoin is not backed by fiat currencies, a legal tender backed by the government that issues it. So the cryptocurrencies like bitcoin work on the value created by demand and supply.
In a response to ComputerWorld, Facebook spokesperson said, “Like many other companies Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications. We don’t have anything further to share.”
Facebook’s cryptocurrency could allow users to send money to their contacts, similar to how PayPal or Venmo does. However, the difference here is that there would a central bank or clearing firm facilitating the transaction. Facebook’s cryptocurrency could allow cross-border payments as well, but only to verified customers. The platform will enforce the KYC process before letting users buy the currency.
The company has increased its hiring efforts to build a cryptocurrency team. Facebook is looking to hire a candidate for ‘lead commercial counsel, Blockchain’ position. Facebook’s career website has 20 job listings related to blockchain.
Former PayPal President David Marcus stepped down from his seat at Coinbase to join Facebook as a blockchain research lead. The hiring efforts clearly indicate that Facebook is serious about its blockchain project.