In 2018, news surfaced about Facebook making moves towards playing the financial game. Today, it strides into those waters by acquiring Chainspace – a blockchain firm founded by University College London. This is a clear indicator that Facebook is now eyeing on making their crypto projects.
The Chainspace website describes its project as “a planetary scale smart contracts platform” that uses “distributed web of blockchains for scalability, speed, and privacy.”
Further, a Facebook spokesperson confirmed that former Chainspace employees were working on the development of its blockchain technology. He refused to divulge any more details on that regard.
A Facebook spokesperson confirmed that former Chainspace employees are working in its blockchain division but stayed mum on everything else, “Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications. We don’t have anything further to share.”
David Marcus, former president of PayPal and current head of Facebook’s Messenger, is heading the initiative. The social media phenomenon has “aggressively” hired blockchain researchers and developers and has about 40 employees working on the project.
Going by sources, Facebook wants to extend this service to be used for remittances on its WhatsApp Messenger: a platform with over 200 million users in India. It is very strategic on their part considering how India represents over 10% of the global remittances market, and people are looking for a loophole in the accountability system. The new currency is likely to be a dollar pegged stablecoin.
The tech giant has had a bad run over the last few years starting with the Cambridge Analytica data breach to the revelation during the 2016 elections in the USA. They’ve taken a beating after beating, to say the least. All this only led to a partially tarnished image.
Given the number of concerns Facebook’s users have regarding privacy, it wouldn’t make an ideal platform for volatile, decentralized currencies.
But let’s not forget, the company has already revamped itself from being just a website to unbundling into a collection of apps. It indeed has come a long way. Becoming a cryptocurrency player could prove to be advantageous for them. They sure have the capital, the masses and the technology.
The success of this acquisition purely lies on whether users are willing to adopt digital currency despite all the odds.