Three years ago, Mark Zuckerberg, chief executive of the company then known as Facebook, set his sights on the global finance world by announcing a new cryptocurrency called libra, which was then, and still is now, better known as the seventh sign of the zodiac.
The stars were not aligned for libra. The public was bemused, but central banks and regulators were appalled, no doubt correctly assessing the project as a money launderers’ dream that would prove incompatible with financial stability.
Libra was rebranded as diem in late 2020, but attempts to retool it to placate regulatory concerns floundered, and diem's assets were sold to Californian bank Silvergate in January. Meta, as Facebook's parent company is now known, appeared to have given up on its digital payment ambitions.
The opposite is the case. The Financial Times reported this week that Meta was readying plans to introduce virtual tokens and cryptocurrencies to its family of apps: people are, after all, going to need money in the metaverse.
Meta’s cryptocurrencies are known internally as “Zuck Bucks”, which (alongside “Zuckerbucks”) is also what US Republicans sometimes call political donations by the Meta boss.
These Zuck Bucks could act as in-app tokens similar to those used by gaming apps, and indeed Facebook itself has some experience in this business, having once operated a scheme known as Facebook Credits.
Loans and NFTs
But its plans don’t stop at such humble beginnings: Meta is also said to be exploring financial services such as small business loans, while a pilot facilitating the posting and sharing of non-fungible tokens (NFTs) on Facebook is imminent.
These developments come at a time when Meta would be wise to lessen its dependence on the advertising market for revenues amid a privacy crackdown and a new competitor in the shape of TikTok.
But nothing, apart from the company name, has really changed since the early days of libra. Zuckerberg’s desire to push the metaverse into existence and then carve out a wide-ranging financial role for Meta must be met with a robust response from regulators. For any single entity to acquire too much power within it, would be a virtual calamity.