There’s been a lot of speculation about Facebook’s blockchain activities. Yesterday the Wall Street Journal (WSJ) revealed that Facebook has been talking to Visa, Mastercard and payment processor First Data Corp and is targeting e-commerce payments and user rewards.
The WSJ reports that “Project Libra” involves a digital coin that Facebook users can send to each other or use to make purchases. Facebook is in discussions with e-commerce companies and apps to accept the coin. Much like many sites which offer the option to login using Facebook, those same credentials could be used for payments. The incentive for e-commerce sites is a reduction in merchant fees.
Plus e-commerce sites could potentially use the Facebook tokens received to pay for Facebook adverts.
One of the most interesting ideas mentioned was the possibility of users being rewarded for viewing adverts. This sounds similar to the Brave internet browser which offers Brave Attention Tokens (BAT) to users who opt-in to private ads.
A year ago Facebook set up a blockchain unit led by David Marcus, former President of Paypal. In December Bloomberg reported that Facebook was working on a stable coin for overseas remittances particularly to India, Facebook’s largest user base.
Ledger Insights ran some analysis which indicates this may not be attractive because India is a popular remittance destination. Hence the conventional remittance costs are not that high, and the scope for revenues for Facebook may not be enormous. It couldn’t justify the $1 billion that the New York Times claims Facebook is trying to raise for its cryptocurrency venture.
Furthermore, since the Bloomberg revelation, Indian banks announced they are clubbing together to address cross border remittances jointly. Facebook would have to integrate with the Indian banking system as an off-ramp.
No Ledger Insights’ team member owns any Brave tokens