This week saw global service outages taking Facebook off the grid on Wednesday, the longest outage in 15 years. The ignominy of having to announce this on Twitter must have had Facebook executives wincing.
The outage comes a week after mainstream media revealed that Facebook is working on a secret project to develop a “Facebook Coin”. Facebook quietly secured an e-money license from the Central Bank of Ireland two years ago permitting e-money issuing and payment services provision including credit transfer, payment transactions, and money remittance.
Jamie Dimon, the CEO of JP Morgan, fired a shot over the bow of the banking sector in his 2015 letter to shareholders warning that “Silicon Valley is coming” to challenge the banking and payments space. His own position on cryptocurrency has toed and froed, calling Bitcoin a fraud at one stage and creating ambiguity around where large financial institutions stand on cryptocurrencies. With the launch of the JPM Coin last month, an institutional cryptocurrency that can be redeemed for a dollar and can be used for cross border debt products, I think we have eliminated the ambiguity.
It is patently clear that financial institutions and Silicon Valley big tech are adopting cryptocurrencies and digital assets and are planning big plays – we have come through the stage of denial, I suggest we skip anger and move right to bargaining.
The Facebook Coin, a play out of the WeChat playbook, is reported to be a cryptocurrency known as a stablecoin. Stablecoins are designed to minimize the volatility of cryptocurrencies, like Bitcoin’s big daily price swings, by pegging to fiat currencies like the US Dollar or being backed by other assets or commodities such as gold.
Read the rest at: Facebook money