Social media giant Facebook is exploring the benefits of releasing its own cryptocurrency, financial news outlet Cheddar reported on Friday.
Citing anonymous sources familiar with the matter, senior reporter Alex Heath said that the company — whose $533 billion market cap is a $140 billion larger than the current cryptocurrency market cap — is holding serious, high-level discussions about directing the focus of its blockchain research team toward releasing its own cryptocurrency.
“Sources say that Facebook is specifically interested in creating its own digital token, which would allow its more than two billion users to facilitate transactions without government-backed currency. Facebook is also looking at other ways that it could use this core blockchain technology that underpins these popular cryptocurrencies like bitcoin and ethereum.”
He added that the company is also evaluating how it can use blockchain technology to improve identity verification and secure its backend infrastructure — perhaps even including how it manages customer data.
As CCN.com reported, Facebook announced last week that it had created a new team dedicated to researching blockchain technology. That team is led by Facebook executive David Marcus, who is also a sitting member of the Coinbase board of directors.
Marcus, who formerly served as president of PayPal, is an outspoken advocate for cryptocurrencies, and his experience at the digital payments firm makes him an ideal choice to oversee Facebook’s potential foray into this space.
The venture would likely see Facebook make “strategic acquisitions” in the cryptocurrency industry as it seeks to build out its blockchain infrastructure.
Discussions are still preliminary, and if Facebook does decide to issue its own cryptocurrency it will likely be “years away.”
Facebook would not be the only social media platform to launch its own cryptocurrency. Telegram says that it has raised $1.7 billion through an initial coin offering (ICO) to launch a “third-generation blockchain” called the Telegram Open Network, while chat app Kik is creating a blockchain token called Kin.
Facebook, Heath said, does not currently plan to hold an ICO, both because the company has billions of dollars on its balance sheet and because selling the token could have negative repercussions on the firm’s already-battered reputation. Instead, the firm may airdrop the coins to its users or reward it to them in some other manner.
Featured Image from Shutterstock
Last modified: June 11, 2020 10:07 AM UTC