The financial unit of Facebook's parent company (Facebook shares) Meta Platforms, Meta Financial Technologies, plans to introduce a mix of new virtual currencies, tokens and Non-Fungible Tokens (NFT) into its platforms, the Financial Times reported Wednesday, citing people familiar with the internal discussions.
What happened?
Having lost more than 30% of its market capitalization in February after revealing that its apps are waning in popularity compared to competitors like TikTok, Meta is exploring alternative ways to attract and retain users.
As part of his plans to build a metaverse, Meta reported that he has come up with plans to create a virtual currency that would fuel the metaverse digital economy. Employees allegedly dubbed the virtual currency "Zuck bucks".
Sources speaking to the Financial Times said this virtual currency will likely not be based on blockchain technology, given the recent difficulties faced by Meta to launch a cryptocurrency. Earlier this year, Meta sold its diem cryptocurrency project after regulators in the United States refused to give the green light to competition and monetary stability concerns.
Meta staff, in their efforts to find the less regulated way to offer a virtual currency, reported that they agreed on a non-blockchain-based digital token similar to the one used in the popular children's game Roblox.
The FT report added that Meta is considering introducing new so-called "social tokens" or "reputation tokens", which could presumably be released to users within Facebook groups for their contributions. Meta is also said to be mulling over "creator coins," which the FT says could be associated with influencers on Meta's Instagram platform.
Elsewhere, a pilot to publish / share non-fungible tokens (NFTs) starting in May is also in the works and will presumably be "quickly followed" by a feature that allows Facebook group membership based on NFT ownership.
Crypto / Web3 enthusiasts are unlikely to respond positively
While many will be excited by the news that Meta Platforms plans to add features that will spur the nascent NFT economy, reports that Meta's planned digital currency will not be decentralized and based on blockchain technology is unlikely to go down well in the crypto community.
Distrust of centralized power is a defining characteristic of the crypto community and the broader Web3 movement. If the digital currency that powers the economy within Meta's metaverse is not decentralized, this gives Meta tremendous power over users, something that many Crypto / Web3 enthusiasts might see as dystopian.
They will likely raise concerns about the risks of arbitrary exclusion from Meta's virtual economy based on things like political affiliation. They will also raise concerns that the centralized issuer of the virtual currency (in this case Meta) may fall into the same inflationary money traps that issuers of major fiat currencies have.
Meta would be exploring some ideas such as storing user data on a blockchain, and ways to give users direct control over their digital identity, which the Financial Times has framed as Meta "embraces the ideals of the Web3".
But the plans for "social tokens" or "reputation tokens" raise concerns that Meta Platforms may move towards promoting a social credit scoring system like the one used in China, an idea widely hated in crypto / Web3 circles.
However, Meta thinks the plans for these tokens would allow him to remove himself as a central content moderator, giving Facebook communities more power in terms of self-moderation. A reduction in Facebook's power as a centralized content moderator would likely be welcomed by most.
