FP ExplainersApr 08, 2022 17:29:25 IST
After giving up on its cryptocurrency venture named Diem, Meta, the parent company of Facebook and Instagram, is reportedly planning to introduce virtual currency to its apps, internally dubbed as “Zuck Bucks”.
According to a report by Financial Times, the social media conglomerate aims to use the virtual token for rewarding creators, lending and other financial services.
Even though it’s still in early stages, the news of Zuck Bucks comes at a time as Meta is expanding its services around the metaverse, a virtual environment where people interact, work and play.
Let’s find out more about the virtual currency, Zuck Bucks:
What is Zuck Bucks?
Seemingly named for Meta founder, chairman, and CEO Mark Zuckerberg, Zuck Bucks are unlikely to be a cryptocurrency.
The report by Financial Times suggests that Meta is possibly leaning towards in-app tokens that would be centrally controlled by the company.
An example of such currency is Robux that is used in popular children’s game Roblox, or V-Bucks in Fortnite.
As per the report, Meta’s virtual tokens are intended for the metaverse and may not be based on blockchain technology.
Similar to Roblox, Zuck Bucks could give Meta a new revenue channel and control over transactions in its apps, including Facebook, Instagram, WhatsApp and the Meta Quest virtual reality platform.
The in-app tokens could probably be used to pay creators on Instagram or reward people who make meaningful contributions in Facebook groups.
The company is also looking into traditional financial services like offering loans to small businesses.
According to a report by CNET, a Meta spokesperson said the company continuously considers new products.
“As a company, we are focused on building for the metaverse and that includes what payments and financial services might look like.”
Not Facebook’s first venture into financial services
In its early years, social media platform Facebook launched Credits in 2009 to facilitate in-app purchases in games hosted on the website, like FarmVille.
Even though it was initially successful, Facebook Credits was shut down after four years when international payments became a headache due to fluctuating exchange rates.
The company’s more recent cryptocurrency efforts collapsed too, after regulators halted the platform’s bid to launch a stablecoin linked with the US dollar.
In 2019, Facebook announced Libra, a cryptocurrency that was to be backed by several international currencies, however, it faced criticism from politicians and central bankers that it would undermine existing currencies.
As several of its partners left the project, Facebook rebranded Libra to Diem in late 2020. The cryptocurrency project was shut down after several congressional hearings and high-profile staff departures.
Diem CEO Stuart Levey said in a press release that the decision to sell was made after it “became clear from our dialogue with federal regulators that the project could not move ahead.”
With inputs from agencies
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