If Bloomberg and the New York Times are to be believed, later this year Facebook will introduce a cryptocurrency which will allow WhatsApp users to send money instantly. Yes, that’s right: Facebook. Cryptocurrency. Earthquake! Revolution! The world is tilting on its axis! The end times are cometh!
Except – um – what exactly are people going to do with FaceCoin, once they receive it?
This is not Facebook’s first venture into virtual currencies, payments, or peer-to-peer payments via messenger app. Remember Facebook Credits, its previous virtual currency, launched in 2011 and sunset two years later? Remember Facebook Gifts, launched in 2012 and sunset two years later (there’s a theme here) in part because, to quote the redoubtable Josh Constine, “Facebook never found a way solve distance and localization problems to make Gifts work internationally”? And of course Facebook Messenger Payments launched in the US in 2015 and expanded to Europe two years later.
But FaceCoin is different; FaceCoin is on a blockchain. (As a longtime blockchain enthusiast I feel I have earned some right to be a bit sarcastic here.) And FaceCoin is reportedly a stablecoin backed by a basket of fiat currencies, a la the SDRs of the IMF.
So it’s on a blockchain. What does a blockchain give you? Well, conceivably, smart contracts, but if it’s a backed stablecoin used for P2P transfer, it’s hard to see how those are relevant. Also, conceivably, privacy. Right now the crypto world offers stablecoins (Dai, Paxos, etc.) and privacy coins (ZCash, Monero, Grin) but — weirdly — nobody offers a private stablecoin. If Facebook were to do so, that would, in fact, be a genuinely big deal. Not least because: