Facebook’s parent company is once again working on plans to create digital tokens for its users, despite the collapse of the Diem stablecoin project.
In this iteration, the virtual coins will not be cryptocurrencies or stablecoins but will serve as vehicles to financialize the Facebook ecosystem. The plan comes as Meta works to expand the company’s revenue stream beyond its current advertising model.
Digital Tokens for the Facebook Metaverse
According to the Financial Times, Meta is developing modalities to float virtual tokens for its metaverse concept. Dubbed “Zuck bucks” after the company’s founder, these digital assets will form part of a diversified financial strategy for Meta.
The plans for these tokens are still in the early stages of development, but initial reports indicate that they will not be crypto- or blockchain-based. This decision is likely Meta’s way of choosing the path of least resistance for any digital assets it may issue in the future.
Cryptos issued by tech firms often draw attention from regulators given the social and network effect associated with such companies. These concerns have certainly been at the forefront of the opposition to Diem.
With crypto and blockchain possibly out of the question, these tokens might come in the form of in-app digital assets, according to people familiar with plans being developed by Meta Financial Technologies, the financial arm of the company.
Apart from these in-app tokens, Meta is also said to be working on “reputation tokens.” These social tokens could serve as rewards to incentivize meaningful interaction on platforms like Facebook.
Meta’s work on Zuck Bucks comes in addition to the planned rollout of nonfungible tokens (NFTs) on Facebook and Instagram. Reports indicate that a pilot test for NFTs on Facebook could happen as early as mid-May. NFTs and digital tokens could serve as a means for Meta to compete with social media rivals like Tik Tok and big-tech competition like Apple.
Diem (Formerly Libra) Now Largely Defunct
Facebook first introduced the whitepaper for its former Libra project back in June 2019, which saw pushback from regulators in the United States and across the globe.
Amid increased regulatory pressure, the Libra Association carried out several changes, which included amendment of the whitepaper, rebranding of the digital wallet from Calibra to Novi, and changing the consortium’s name to Diem.
Earlier in 2022, reports emerged that the Diem Association had sold its assets to California-based bank Silvergate. Diem CEO Stuart Levey made this statement concerning the purchase:
“I’m tremendously proud of the efforts of our members, partners and teams who have worked tirelessly to develop the Diem Payment Network with robust controls to protect consumers and combat financial crime. We have confidence in Silvergate’s ability to take Diem’s technology forward and transform the future of payments.”
Whether or not Meta and Facebook will succeed in this new venture is uncertain. But what is certain is that they will have learned from their mistakes with Diem. But will it be enough to catch the eyes of the crypto community?
Curious about the failure of Diem to take off? Read how Facebook’s cryptocurrency venture drew to a close and sold off all its assets.
Want to learn more about how and why Facebook continues to bleed value? Read our article, Why is Facebook Faltering?