The business worlds most loathsome CEO has announced he will give a digital currency another shot after the damaging and embarrassing roll back of the Diem attempt.
The Zuck Buck – Does anyone actually give a …?
The man who gave us repeated scandals, including the Cambridge Analytica revelations, which stoked concerns about users’ data privacy and rumours of aiding election rigging as well as a host of other abhorrent failures on his platform just can’t see how the rest of the world perceives Facebook.
But there is good news. More than $200 billion was wiped off the value of Meta, blame for falling profits and users is focused solely on TikTok…
Meta warned that the current quarter was likely to be its slowest period of growth on record. Wall Street reacted. Shares plunged. 20% was wiped off the value, the biggest ever single-day drop in market capitalisation for any company. Good.
The Zuck Buck
Now Meta has drawn up plans to introduce virtual coins, tokens and lending services to its apps, as Facebook’s parent company pursues its finance ambitions again, despite the collapse of Diem.
The company is seeking alternative revenue streams and new features that can attract and retain users, as popularity falls for its main social networking products — a trend that threatens its $118 billion-a-year ad business model.
Facebook’s financial arm, Meta Financial Technologies, has been exploring the creation of a virtual currency for the Metaverse, the Zuck Buck.
A Brief Reminder…
Lets just take a second to remind ourselves of something here…On June 24 2021, Jay Powell and Janet Yellen sat down for their weekly breakfast at the US Treasury building, according to an FT report.
There was only one major question on the agenda: should they give the green light for a global cryptocurrency designed by Facebook?
An alliance of tech companies led by Facebook proposed to launch a product it hoped would profoundly change the world (for which read: executives who thought they could charge into finance and make billions).
Powell told Yellen, he was willing to give the go-ahead for Facebook and its partners to trial Diem, as the digital currency backed by the US dollar was called at the time.
He knew the Treasury had concerns, not least the possibility that such a currency could become a vehicle for money laundering or grow so popular as to threaten global monetary stability.
Facebook’s reputation was already sullied in Washington, following a series of controversies over data privacy, misinformation and alleged censorship.
During his presidential bid the year before, Joe Biden said he had “never been a big fan” of Facebook’s founder Mark Zuckerberg, describing him as “a real problem”. Prominent Democrats and Republicans had already spoken out against Diem.
Powell wanted backing from Yellen, but she had made up her mind: she was out.
“Yellen told him it was his decision to make, but that she would not protect him from the political fallout if he did so – And that was the end of Facebook’s digital currency,” according to the report.
Diem’s leadership would spend the next six months in a last-ditch drive to rescue the project that began by attempting to woo government regulators, then trying to browbeat them.
But in January 2022, Diem confirmed that it was winding down for good. The remains of Zuckerberg’s digital money dream would be sold to a little-known Californian bank for $182 million, marking one of the most spectacular, if little-noted, failures of his career.
The Future?
So what is different about the hideously named Zuck Buck? Well, to start off with, it’s a massive climb down from the original concept of Diem. It also seems to be a rationalisation of all the other parts of the Meta financial apps.
Investments in facilitating payments within WhatsApp and Messenger and in helping creators monetise their activity, for example through NFTs seems to have been prioritised.
There are also plans to merge its wallet for Facebook Pay, its existing P2P payments system, with Novi, the digital currency wallet that was initially supposed to hold the Diem coin.
But really, it’s a token based coin that is going to be used primarily to function in the Metaverse and Web3, in which Meta seems to be so focused on – centrally controlled by the company, similar to those used in gaming apps.
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