Drastic Shifts in Meta's Crypto Game: From Diem to Stablecoins
Meta reportedly reconsiders its strategy on crypto-stablecoins, signaling potential return to the crypto market.
Meta, the tech giant, is stealthily navigating the cryptocurrency world once more. Three years since the Diem project's demise, Meta is devising a new approach to harness the power of stablecoins, particularly for facilitating pocket-sized transactions between platforms such as Instagram, Facebook, and Threads.
According to Fortune's report, Meta is deep in discussions with various crypto companies, yet no definitive decisions have been made.
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Remember Meta's exuberant plans for Libra, later known as Diem? They bit the dust in 2022, crumbling under mounting pressure from US regulators and politicians. After a temporary hiatus, Meta is back in the game, this time with a more reserved strategy and a fresh leadership team. Ginger Baker, recently recruited as Vice President of Product, is driving preliminary discussions about utilizing stablecoins for business and creator payments. Baker brings a rich background in financial technology and crypto to the table, undoubtedly influencing Meta's next moves in the digital currency realm.
Bridging the Gap: Stablecoins and Content Creators
One of the primary concepts under examination is leveraging stablecoins such as USDC and USDT for remitting tiny payments to creators and businesses worldwide. Influencers on Instagram, for instance, usually receive payments of approximately $100 per transaction—sums that can be swallowed by conventional bank fees when sent across borders.
Stablecoins may speed up these payments and slash fees. Sources report that Meta hasn't yet locked in a specific stablecoin but plans to use a varying selection based on the region or application. A crypto executive privy to the discussions pointed out that Meta is very much in "learn mode" and open to implementing a multi-token configuration.
The Stablecoin Wave: Giants Join the Fray
Meta isn't the only player diving headfirst into stablecoins. Stripe now supports accounts based on stablecoins in over 100 countries. Visa has partnered with Bridge and invested in BVNK, a startup specializing in stablecoins. Fidelity and Ripple are also developing stablecoin products.
With the stablecoin market expanding to over $230 billion and projected to hit $2 trillion by 2028, it's no wonder Meta wants to stay in the loop.
Featured image from Unsplash, chart from TradingView
Regulatory Landscape
Meta's previous attempt with Diem, now defunct, confronted significant regulatory obstacles. This time around, Meta intends to work with compliant stablecoins to minimize regulatory risks compared to launching its own token. However, the U.S. regulatory landscape remains uncertain, with no comprehensive framework currently in place.
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- Eventually, Meta's new strategy for stablecoins could eventually lead to reduced fees and faster transactions for content creators, as they aim to use stablecoins like USDC and USDT for remitting payments.
- Despite the U.S. regulatory landscape remaining uncertain, Meta, pursuing a more reserved strategy and fresh leadership, is stealthily navigating the cryptocurrency world again, this time focusing on stablecoins for business and creator payments.
- The stabilizing nature of stablecoins has caught the attention of various financial institutions, with Stripe, Visa, Fidelity, Ripple, and others investing or partnering with stablecoin-related startups or products.
- Given the growing stablecoin market, anticipated to reach $2 trillion by 2028, Meta seemingly wants to stay ahead of the curve, working with compliant stablecoins to minimize regulatory risks compared to launching its own token.