What exactly is it?- Technology News, Firstpost
FP explainersApr 08 2022 17:29:25 IST
After giving up its cryptocurrency venture Diem, Meta, the parent company of Facebook and Instagram, is reportedly planning to introduce virtual currencies into its apps, internally referred to as “Zuck Bucks”.
According to a report from Financial Times, the social media conglomerate wants to use the virtual token for rewarding creators, loans and other financial services.
While still in its infancy, Zuck Bucks’ news comes at a time when Meta is expanding its services around the metaverse, a virtual environment where people interact, work, and play.
Let’s learn more about the virtual currency, Zuck Bucks:
What is Zuck Bucks?
Seemingly named after Meta founder, chairman and CEO Mark Zuckerberg, Zuck Bucks is unlikely to be a cryptocurrency.
The Financial Times report suggests that Meta may be leaning towards in-app tokens that are centrally managed by the company.
One such currency is Robux used in the popular children’s game Roblox, or V-Bucks in Fortnite.
According to the report, Meta’s virtual tokens are intended for the metaverse and may not be based on blockchain technology.
Like Roblox, Zuck Bucks could give Meta a new revenue channel and control transactions across its apps, including Facebook, Instagram, WhatsApp and the virtual reality platform Meta Quest.
The in-app tokens can likely be used to pay creators on Instagram or to reward people who make meaningful contributions in Facebook groups.
The company also explores traditional financial services, such as lending to small businesses.
According to a report from CNET, a Meta spokesperson said the company is constantly considering 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, the social media platform Facebook launched Credits in 2009 to facilitate in-app purchases in games hosted on the website, such as FarmVille.
While initially successful, Facebook Credits was discontinued after four years when international payments became an issue due to fluctuating exchange rates.
The company’s more recent cryptocurrency efforts have also collapsed after regulators halted the platform’s bid to launch a US dollar-pegged stablecoin.
In 2019, Facebook announced Libra, a cryptocurrency that would be backed by several international currencies, but was criticized by politicians and central bankers for undermining existing currencies.
When several of its partners left the project, Facebook changed Libra to Diem at the end of 2020. The cryptocurrency project was halted 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 progress”.
With input from agencies