How Should We Be Reacting?
Among those who appear the most enthusiastic are Mark Mahaney and Zachary Schwartzman from RBC Capital Markets. Both men claim that the Facebook’s cryptocurrency initiatives are among the “most important” in its long history as a social media and tech giant. In an interview with CNBC, both figures claim:
We believe this may prove to be one of the important initiatives in the history of the company to unlock new engagement and revenue streams… We believe Facebook will use crypto to facilitate a platform for: 1) payments; 2) commerce; and 3) applications and gaming.
At this stage, it’s unclear how Facebook plans to make money through coin usage. Perhaps the social media platform will charge transactions fees or certain taxes on all relevant charges, though at press time, the only confirmation we’ve received regarding funds are about those going towards the development of the project. Development and garnering income are two very different aspects.
This raises a lot of questions. It can be argued that Facebook hasn’t always earned its revenue streams through appropriate means. Look at last year’s scandal involving Cambridge Analytica. The company had been selling customers’ information to the company for advertising purposes. The keyword here is “selling.” That obviously means Facebook was earning money from the information it was sharing with Cambridge, and so few details have emerged regarding Facebook Coin as of late that one can’t help but wonder if those same unethical methods of money-making will show their faces again.
Nevertheless, it appears Facebook is making certain moves that would place it in a more “legitimate” category. For example, it was recently announced that the social media platform acquired the services of former British bank lobbyist Ed Bowles, who will advise Facebook through political and regulatory scrutiny as it enters the crypto arena. Bowles worked for 12 years as a public policy administrator with the London-based financial firm Stan Chart. He will begin his work with Facebook in September 2019.
In addition, Mark Zuckerberg – the CEO of Facebook – met with former British bank governor Mark Carney last April to discuss potential crypto regulations in the U.K. that could hinder the use and development of Facebook Coin.
We’ll Handle Facebook No Matter What
Olivier Guersent, the European Commission’s director-general for financial stability, was unaware that any meeting took place, but didn’t seem too concerned about it according to his latest interview. He comments:
Facebook has a right like anyone else to launch itself on the market, but the issue is really the connection with the rest of their activities and the collection of data. That’s the angle through which we could tackle it.