NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, June 26, 2019

By Owen Williams

Facebook has been trying to “fix” how we send and receive money for years through products like Facebook Credits and “Send Money to Friends in Messenger.” Enter Libra, an upcoming cryptocurrency that has a couple of modest goals: “Reinvent money. Transform the economy.”

Though you may be unaware, Facebook has been working toward this project for a long time. Earlier attempts at creating a new financial infrastructure, like Facebook Credits, focused on monetizing apps and services that were built on the Facebook platform. At the time, you could buy Facebook Credits, which would then allow you to make purchases in games like FarmVille, for example. Think of it like an in-app currency for the social network and its various appendages — more like gold in Candy Crush than actual money. Ultimately, it failed, in part because there wasn’t a broader use case.

But the idea maintains an appeal. Getting developers to use a Facebook “currency” would grant the company access to the valuable credit card details of millions of users buying virtual products — as well as a valuable cut of the transactions made using its tools.

Photo courtesy of NeONBRAND.