Facebook “Getting Involved” In NFT Space As It Prepares To Roll Out Digital Wallet, Stablecoin
“When you have a good crypto wallet like Novi will be, you also have to think about how to help consumers support NFTs,” Facebook’s David Marcus, head of Facebook Financial (F2) and co-creator of Facebook-initiated cryptocurrency Diem, said earlier this week.
The statement by the social media giant’s crypto chief resounded across the crypto-space as investors recognized that a firm with reach across the globe, and a built-in client-base of billions, has now finalized the development of Novi – its proprietary cryptocurrency wallet (according to a blog post this week) – is committed to adding its own stablecoin ‘Diem’, once it passes regulatory muster, and furthermore is “definitely looking” at possible ways to get involved in the non-fungible token (NFT) industry.
Regarding the stablecoin, Diem – which has faced sine early pushback from lawmakers and regulators although the tide is now turning as Facebook positions itself against such competitors as Tether – Marcus said Facebook would consider launching the Novi wallet without Diem “as a last resort” but he believes both are necessary to change the way people make payments.
Without more innovation in payments technology, Marcus said, countries in the West like the U.S. will struggle to keep up with China in adapting to a world where digital payments are dominant.
“We’re really falling behind at an alarming rate,” he said.
As a reminder, The Diem Association, a group of Facebook and 25 other companies and nonprofit groups once known as Libra, announced in May 2021 that it was moving its main operations to the U.S. and partnering with publicly-traded Silvergate (whose tiny market cap of just $3 billion assures that the company will soon be acquired by either Facebook or someone who wishes to block the social network at a far higher purchase price) to issue its cryptocurrency backed by U.S. dollars.
Silvergate, a prominent but small (its capitalization of just $2BN is smaller than the market cap of most memecoins) player in the cryptocurrency industry, which will issue the coin and manage Diem’s reserve of U.S. dollars, the association said Wednesday in a statement.
According to the partnership press release, Silvergate will issue a U.S. dollar backed stablecoin, known as DiemUSD, the first asset ever issued on the Diem payment system, which will enable the conversion of fiat USD to and from the stablecoin through a process known as “minting” and “burning.”
The stablecoins can then be used by virtual asset service providers (“VASPs”) for a variety of use cases, which includes commerce between consumers and merchants, as well as cross-border payments.
Specifically, Marcus noted that he hopes Novi (and more specifically the stablecoin Diem) will be used to reduce transaction costs and make cross-border payments more efficient, warning that for now Bitcoin was inappropriate for that purpose:
“If you’re sending money around the world, you can’t have the value of the asset that you send decrease by 20% in a day or 10% in a day. That’s a volatility that’s actually inappropriate for payments,” he said.
“Maybe one day but not right now.”
So, what will Facebook-ers spend their stablecoin on?
Well, we may have got a hint during a Bloomberg Television interview this week, when he noted that Facebook is considering multiple options to introduce NFT features, as it finds itself in a “really good position to do so.”
“We’re definitely looking at the number of ways to get involved in the space because we think we’re in a really good position to do so,” he said.
Marcus said it was still too early to detail Facebook’s NFT-related product plans, but the company’s developers are on the case.
“It’s really an area that is worth exploring, and one where we can have a positive impact for both creators and consumers.”
Watch the full interview below:
To summarize, the largest private global network on earth is quietly forming their own stablecoin ecosystem (in partnership with the Silvergate, their payment administrator) and will use NFTs an initial potential spending target.