The idea that a company as powerful and autocratic as Facebook Inc. would have ever dived into crypto-currencies has always seemed a little like the Death Star who decides to organize a Christmas party for the personnel.
Whether it is the very model of Bitcoin (Western wild capitalism where nobody is responsible) or the more corporate efforts to take advantage of the blockchain approach (databases distributed through networks within a company or industry) is It was difficult to see how a billionaire like Mark Zuckerberg could find a use for this. All of your business depends on centralized data collection to sell your ads profitably.
So it is not surprising that the last step of Facebook towards a blockchain product, as reported by Bloomberg News last week, seems more like a simple cooptation of technology for a rather trivial payment system, rather than a crazed race to join the crypto-revolution.
The digital token of the company, still in its infancy, would allow users to transfer money to WhatsApp, focusing primarily on the remittance market in India. It would be a so-called "stablecoin", which is usually pegged to a currency like the dollar to minimize volatility. There would be a pool of assets stored in custody to protect it.
You can already hear the screams of anguish of the crypto-evangelists. This is not a token designed to move legal currencies or rise in price. In theory, a FaceCoin would never be more valuable than the $ 1 that supports it (although in practice the markets can do fun things). It is essentially an online IOU.
Zuckerberg is hardly inventing the wheel here since migrant workers have already sent home $ 69 billion to India last year, and India is not a mature crypto-market anyway after its central bank has virtually outlawed digital currencies this year. Facebook would be competing with services like PayPal Xoom, or WorldRemit, or even Western Union. The company could become more cashless as a result, but it will no longer be encrypted.
The blockchain prophets had once imagined that they could create a way for people to control and sell their personal data rather than let Big Tech take advantage of it. But the Facebook project seems the opposite: blocking users in a safer way inside its walled garden by offering them an internal currency. Zuckerberg and his lieutenants have long resisted giving up data control; of course, given how profitable it is.
So, rather than repairing the internet giants, the blockchain is repaired. The crypto startups that promised to free the world from the yoke of capitalism now can not even keep their staff employed profitably. The approach of Facebook is to take the broken pieces of the blockchain and create something much more acceptable to shareholders. This will not please people who fear its monopoly power, and for good reason. Another thing for chewing regulators.
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Lionel Laurent is a Bloomberg Opinion columnist who deals with finance and markets. He previously worked at Reuters and Forbes.
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