Meta looks again at the stablecoin project – bad memories are brought back
- Meta is working on a stablecoin project that should become concrete in the second half of the year. Four years after the failed Libra/Diem project, it is the second attempt.
- However, it is a completely different approach than Libra. Instead of its own token, this time Meta wants to integrate the stablecoins of external, specialized partners.
While Libra, later renamed Diem, was designed as a stablecoin to be issued and managed by Meta itself, the company is now pursuing a comparatively risk-free concept. It is not intended to become its own stablecoin, but rather to integrate existing stablecoins such as USDC.
The technical and organizational processing should be carried out by partners who already have the appropriate licenses and operate infrastructure. In this way, Meta avoids all the problems that caused the original project to fail in February 2022.
Wallet payment functionality for billions of customers
However, Meta itself is working on a new wallet architecture that will enable stablecoin payments in its own apps. The goal is a uniform payment system for Facebook, Instagram and WhatsApp.
Features range from peer-to-peer transfers to creator payouts to international micro-transactions. There should already be tenders for the technical implementation.
Stripe is considered a particularly promising candidate, not least because of its acquisition of the stablecoin infrastructure provider Bridge and the close connection between Stripe CEO Patrick Collison and the Meta leadership team.
Why now?
The timing is no coincidence. The stablecoin market has evolved significantly since the Libra/Diem debacle. Stablecoins are now a central part of global crypto liquidity. Back then, in February 2022, a lot of things were still experimental.
Today, a regulatory environment is emerging in the USA that facilitates the practical use of existing stablecoins. Added to this is the growing pressure from competitors such as X and Telegram, who are themselves working on their own payment systems.
With more than three billion potential customers thanks to Facebook, Instagram and WhatsApp, Meta has a market that could give the entire stablecoin sector a new dimension.
To do this, however, the project must reach the operational phase and not the residual ramp, like Libra/Diem once did.
The stablecoin project, which was not even half finished, was sold off to the US bank Silvergate for the bargain price of $182 million.
It then went bankrupt, not because of that, but as collateral damage from the FTX collapse – but that’s another story.
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