Facebook is considering creating its own cryptocurrency, a virtual token that would allow the social network’s billions of users to make electronic payments on the platform.
Sources familiar with the plan told American financial TV Channel Cheddar, that the company is “very serious” about the plan, as the social network giant begins a fully-fledged venture into blockchain — the technology that support cryptocurrencies.
Facebook which banned cryptocurrency-related advertising in an effort to protect users from fraud in January, is not planning to hold an initial coin offering (ICO), where the public can purchase a limited number of the cryptocurrency, but could instead acquire existing blockchain and cryptocurrency companies.
With about 2.19 billion monthly active users as at the end of the first quarter of 2018, experts believe the development of the in-app virtual coin which will take on Bitcoin, Ethereum and other large currencies, could cause a major disruption in the growing world of e-commerce and digital currencies.
“This could be a major disruptor of all time, hitting both the traditional e-commerce and cryptocurrency brands, says, Dr Bitange Ndemo, the chairman of Kenya’s Blockchain Task Force.
“The 4th industrial revolution will be based on digitalisation. That’s why firms are rushing to tokenise their services.”
The digital currency is expected to complement Marketplace, a Facebook shopping platform, which allows users to buy and sell goods. Some 800 million people in 70 countries already using it.
However, this is not the first time Facebook is experimenting with virtual currencies having launched, Facebook Credits, which could be used to purchase virtual goods like games in 2009, before it was shutdown in 2011 for failing to gain traction.
The plans for development of the Facebook Cryptocurrency were revealed a few hours after the company made its biggest management changes in history, which saw the formation of a blockchain division tasked with exploring potential applications of blockchain technology in its systems.
“I’m setting up a small group to explore how to best leverage Blockchain across Facebook, starting from scratch,” said David Marcus, the former head of Facebook Messenger who will be leading the new division.
In January, Facebook chief executive Mark Zuckerberg said he was studying the technology to “see how best to use them” in Facebook services.
“I’m interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services,” Mr Zuckerberg said in a post.
In recent months, many countries and companies have jumped on the now popular blockchain bandwagon of players in different sectors exploring possible ways of integrating blockchain into their operations and benefit from the vast benefits that come with it.
Blockchain or distributed ledger technology is a digital system for recording transactions allowing, for real-time sharing of information across computers in a network, eliminating the need for central data storage.
In February, Kenya’s ICT Ministry unveiled a 11-member Blockchain and Artificial Intelligence (AI) taskforce pooled from from research institutions, finance, legal and technology sectors, to develop a roadmap that will contextualise the application of the technologies in different sectors.