Facebook and Instagram’s parent company, Meta Platforms, Inc. (FB), plans to introduce digital tokens and lending services into its apps, in a bid to boost other revenue streams, according to a FinancialTimes report.
Key points to remember
- Meta is reportedly considering introducing digital tokens and lending services to increase its alternative revenue streams.
- People familiar with the initiative said the tokens would most likely be centrally controlled by Meta rather than tied to a blockchain.
- The possible introduction of digital currencies in Meta’s applications could align with the company’s foray into NFTs.
- Meta is also exploring traditional financial services, such as offering small business loans.
- Metaverse’s global revenue growth could help offset a decline in Meta’s social media users.
The social media giant is exploring its own virtual “social” and “reputation” tokens – internally called “Zuck Bucks” – for contribution rewards and “creation coins” for Instagram influencers, people familiar with it have said. initiative. The sources noted that the tokens would most likely be centrally controlled by Meta rather than tied to a blockchain to avoid regulatory hurdles. In January, the company scrapped its blockchain-based stablecoin payment system, known as Diem, after facing opposition from policymakers.
The company also focuses on traditional financial services, such as offering small business loans. While there are no immediate plans to launch such offerings, Meta has held preliminary discussions with potential lending partners, according to the FinancialTimes report.
A block chain is a distributed database shared between nodes in a computer network. As a database, a blockchain stores information electronically in digital format. Blockchains are best known for their crucial role in cryptocurrency systems, such as Bitcoin, to maintain a secure and decentralized record of transactions.
Possible alignment with the launch of NFT
A possible introduction of digital currencies in Meta’s applications could align with the company’s foray into non-fungible tokens (NFTs), which would be slated for a pilot launch in mid-May, followed by a phase of testing features that would allow users to own and mint them. Other internal documents seen by the FinancialTimes revealed that Meta is considering monetizing NFTs through fees and/or ads.
In January, rival social media company Twitter, Inc. (TWTR) introduced NFTs to its platform. Although the microblogging site does not directly monetize NFTs, it currently only allows its $2.99 per month Twitter Blue users to view NFTs as profile pictures.
The initiative adapts to the expansion of Meta in the metaverse
Meta remained tight-lipped on Wednesday when asked about the report. “We have no updates to share today,” a company spokesperson told Reuters. However, in January, the head of Meta’s finance division, Stéphane Kasriel, wrote in a memo: “We are making changes to our product strategy and roadmap so that we can prioritize building for the metaverse and what payments and financial services will look like in this digital world.”
the metaverse is a digital reality that combines aspects of social media, online gaming, augmented reality (AR), virtual reality (VR), and cryptocurrencies to allow users to interact virtually.
Facebook was renamed Meta in October 2021, positioning itself beyond social media into a virtual technology company. Earlier this year, the tech giant became a member of the Crypto Open Patent Alliance (COPA), a consortium of tech and crypto companies led by Jack Dorsey’s payments firm Block, Inc. (SQ) which s is committed to sharing crypto-related technologies.
In recent quarters, Meta has seen a drop in user numbers, threatening its advertising revenue, which generates around $120 billion a year. Research firm Insider Intelligence forecasts that Meta’s photo-sharing app Instagram could see its monthly user growth fall to 3.5% by 2025, from 16.5% in 2021. However, growth in revenue from the provision of virtual goods and services is expected to more than offset a slowdown in Meta’s social media business, as data indicates that global Metaverse revenue will reach $680 billion by 2030.