Yesterday Fortune reported that Meta is exploring re-entering the stablecoin sector to use the digital currencies for payouts to creators. The social media firm was the founder of the Diem (formerly Libra) stablecoin project in June 2019. Libra sent central bankers into a collective panic, and was eventually blocked and shuttered in late 2021.
However, Fortune reports that Meta is now more interested in using other stablecoins for payments and is in conversations with various stablecoin firms. In January the company (re-)hired Ginger Baker as VP of Product, who is apparently leading the efforts. She’s spent most of her career in payments, most recently at Plaid as Chief Network Officer and is currently a Board Member at the Stellar Development Foundation.
Previously she spent just over a year at Ripple as well as stints at Square and five years at Visa. With Diem the company was involved at several layers of the technology stack – the blockchain, the stablecoin, the wallet and the payment initiation. Stablecoins have moved on considerably since Meta first launched Diem.
Nowadays many stablecoin issuers are willing to share the earnings on the stablecoin’s reserves with distributors and partners such as Meta. Hence, from a business perspective, there’s less need to be involved in the development of stablecoin and the entire technology stack, although the wallet will prove important. Analyzing Meta’s stablecoin motivations Some of the motivations that drove Meta’s interest in Diem have not gone away.
Back in 2020 the company was already processing $100 billion annually in payments, which is likely to have grown considerably since then. Monetizing that could be interesting. The company is still reliant on advertising for 98% of its revenues, so stablecoin involvement could help with income diversification.
Plus, there’s a regional angle. Advertising is far more profitable for Meta in Europe and North America. Together these regions account for two thirds of Meta’s income, despite only accounting for 22% of its audience.
* Hence, it makes sense to explore boosting revenues from the other 78% of its users, some of whom might be keen to save money on remittances. Meta’s single largest audience is India, where its user base is around 600 million. Meanwhile, the Meta report is the latest in a big news week for stablecoins.
That includes Stripe launching stablecoin accounts for businesses in 101 countries, and Coinbase launching the x402 protocol to make internet payments seamless. *Regional user split based on 2023 figures, the last time Meta published these figures. Normally you should see a Tripetto form over here, but it needs JavaScript to run properly and it seems that is disabled in your browser.
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