When a giant autocratic corporation like Facebook shows interest in a decentralized ecosystem like cryptocurrencies, it always raises some suspicion. Lionel Laurent on Bloomberg says it looks like “the Death Star deciding to throw a staff Christmas party.”
Facebook’s Stablecoin Plans
The Bitcoin model is anti the centralized corporate system in typical capitalist society. It was hard to see Mark Zuckerberg, Facebook’s CEO, whose company depends wholly on selling people’s personal data to ad agencies for a profit having an interest in a technology that seeks to help protect people’s privacy.
It’s no wonder Facebook’s latest step toward a blockchain product, as we reported, is a way to monetize a platform that the company hasn’t been to successfully monetize the billions of users on it. The company was reportedly considering ads on WhatsApp but this payment system seems to be a better approach. So, this move is definitely not Facebook trying to join the crypto-revolution.
The company’s virtual token, which is still in development, would allow users to transfer money on WhatsApp, focusing first on the remittances market in India. The token will most likely be pegged to a currency — a local currency or the dollar to minimize volatility. There would be a pool of assets stored in custody to protect it.
Facebook is not trying to reinvent the wheel here but trying to utilize a technology that could help profit from the huge remittance market in India. Migrant workers already sent home $69 billion to India last year but India’s central bank outlawed digital currencies this year, which makes Facebook attempt daunting.
Also, Facebook will be competing would be competing with services like PayPal’s Xoom, or WorldRemit, or even Western Union that have no government restrictions.
Against An Ethos Of The Blockchain
Many in the crypto-industry see blockchain has a way for us to have control over our private data. Choose who will want to share it with. Rather letting Big Tech profit doing it for us.
However, with Facebook’s project, it looks like the reverse. It would even have more access to people’s data. The control of the data is what gives this kind of company its edge. Given how lucrative it is, they don’t seem like letting that edge go yet.
Lionel Laurent says that “rather than fix the internet giants, blockchain is itself being repaired”. Also, crypto startups would even struggle to keep their best engineers and developers.
Facebook has been building its own in-house blockchain team and sure it would be attracting the best of talents. It seems blockchain could also turn out to be one of the tools of big corporations like the Internet.
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