Facebook owner Meta targets finance with ‘Zuck Bucks’ and designer coins
Meta has drawn up plans to introduce virtual coins, tokens and lending services into its apps, as Facebook’s parent company pursues its financial ambitions despite the collapse of a plan to launch a cryptocurrency.
The company, led by chief executive Mark Zuckerberg, is looking for alternative revenue streams and new features that can attract and retain users, as the popularity of its main social media products such as Facebook and Instagram – a trend which threatens its $118 billion ad-based business model.
Facebook’s financial arm, Meta Financial Technologies, has explored creating a virtual currency for the metaverse, which employees have internally dubbed “Zuck Bucks,” according to several people familiar with the efforts.
It is unlikely to be a blockchain-based cryptocurrency, some people have said. Instead, Meta is looking at introducing in-app tokens that would be centrally controlled by the company, similar to those used in gaming apps such as the Robux currency in the popular children’s game. . Roblox.
According to company memos and people familiar with the plans, Meta is also considering the creation of so-called “social tokens” or “reputation tokens,” which could be issued as rewards for meaningful contributions in Facebook groups, for example. Another effort is creating “creator coins” that could be associated with particular influencers on its Instagram photo-sharing app.
Meta has also explored more traditional financial services, with a focus on providing loans to small businesses at attractive rates, according to several people familiar with the initiative. Although nothing is immediately planned, the company has already had discussions with potential loan partners, one of the people said.
Most of the efforts are in the early stages of discussion and could change or be scrapped, though its plans for integrating non-fungible tokens, or NFTs, into its apps are more mature. Zuckerberg has confirmed an earlier Financial Times report that Instagram will soon start supporting NFTs.
According to a memo shared internally last week, Meta plans to launch a pilot for posting and sharing NFTs on Facebook in mid-May. This will be “quickly followed” by testing a feature that will enable membership in Facebook groups based on NFT ownership and another for typing – a term for creating – NFTs.
NFTs could be monetized via “fees and/or ads” in the future, according to another internal document. Facebook declined to comment.
Meta lost more than $220 billion of its market valuation in February, the day it revealed users were increasingly spending time on new rivals, such as short-form video app TikTok.
The company has recently been looking to find other revenue streams and support e-commerce on the platform, delving into cryptocurrencies and blockchain technology. Its Big Tech rivals, such as Google and Apple, have been more cautious about diving into the budding space.
But the push has been plagued with setbacks and regulatory scrutiny. Earlier this year, the global cryptocurrency project he ran, Diem, was liquidated and its assets sold to a California-based bank Silvergate, after US regulators refused to greenlight the pilot over security concerns. monetary stability and competition.
Amid internal frustrations, Meta’s finance division has suffered what one former employee described as a “mass exodus” of staff over the past six months. Its chief David Marcus left at the end of last year, along with key engineers, compliance staff and nearly all of its legal team.
Those that remain seek to create or support digital currencies in its metaverse — a virtual world filled with avatars that Zuckerberg hopes will eventually generate billions of dollars of trade for digital goods and services.
Staff members are now trying to find the least regulated way to offer digital currency, two people said, with a digital token that is not blockchain-based emerging as the most attractive option.
It would not be the first time that Facebook has introduced such a currency into its ecosystem. It launched Facebook Credits in 2009, a virtual currency that allowed users to make in-app purchases, usually in games such as FarmCity. It made up 16% of revenue when it went public in 2012, according to Barclays, but was shut down in 2013 because it was too expensive to maintain.
In a note from late January, Meta’s new head of finance, Stephane Kasriel, wrote, “We are making changes to our product strategy and roadmap. . . so that we can prioritize building for the metaverse and what payments and financial services will look like in this digital world.
Kasriel, who replaced Marcus when he left the company at the end of 2021, said the company would “accelerate” investments to facilitate payments within WhatsApp and Messenger and to “help creators monetize their business”, for example via NFTs.
It also announced plans to merge its wallet for Facebook Pay — its existing peer-to-peer payment system that doesn’t use blockchain technology — with Novi, the digital currency wallet that was originally intended to hold the Diem coin.
“The wallet will offer payments, identity and digital asset management within the [family of apps and Reality Labs, its virtual and augmented reality arm,] and over time, to other apps/sites,” he said.
Where some of Meta’s efforts focus on digital payments, other efforts are part of broader plans to use blockchain technology to introduce more “decentralization” to its platforms, amid growing buzz in Silicon Valley around the so-called Web3 movement.
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Web3 proponents generally seek to use distributed ledger technology to allow users to have more control and ownership over their data and to disintermediate Big Tech groups that typically monetize this data as part of their cloud-based business models. The advertisement.
But Meta seems to embrace some Web3 ideals. It studies whether storing data on a blockchain, how it could give users more control over their digital identity, and whether their identity or accounts can be transferred or used on other platforms beyond Meta’s apps. , according to a planning document.
Meanwhile, his plans to reward users for credible content with “social tokens” could allow Meta to step back as central content moderator and give Facebook communities more power to moderate themselves. according to the document.
Additional reporting by Cristina Criddle in London