Zuckerberg suddenly restarts stablecoin plan

Author: Leo Schwartz and Ben Weiss Translator: Liam Source: Fortune

In 2019, Meta announced a bold plan: to launch a new stablecoin that would work on Facebook, WhatsApp, and many other digital platforms. However, after facing strong opposition from the U.S. Congress and other legislatures, the company eventually abandoned the plan. Now, Meta is testing the waters in the stablecoin field again. According to five people familiar with the matter, the company is discussing the launch of stablecoins with crypto companies as a means of managing payments, and has hired a vice president of product with stablecoin experience to promote the discussion. The identities of the five people are known to Fortune magazine, but they asked to remain anonymous to discuss the business secrets.  

Meta declined to comment.

Stablecoins, non-volatile cryptocurrencies pegged to the U.S. dollar, have long attracted attention in the blockchain industry, but the Biden administration’s hardline anti-cryptocurrency policies have limited their mainstream adoption. However, the election of Donald Trump as president last November and the recent $1.1 billion acquisition of stablecoin startup Bridge by payments giant Stripe have driven the wider use of stablecoins in the financial sector, especially as a cross-border payment tool.

In the past month, Visa announced a partnership with stablecoin infrastructure provider Bridge, financial company Fidelity revealed it was developing its own stablecoin, and Stripe released a new financial account based on stablecoins.

Meta's interest in the technology reflects the growing attention of non-crypto companies to stablecoins, especially as lawmakers in Congress debate two bills aimed at regulating stablecoins, which are intended to end years of regulatory uncertainty.

Meta's crypto plans

Ginger Baker joined Meta in January as vice president of product, focusing on fintech and payments, according to her LinkedIn profile. She previously served as an executive at fintech company Plaid and remains on the board of directors of the Stellar Development Foundation, a cryptocurrency company that manages the Layer-1 blockchain. According to a person familiar with the matter, she is helping Meta advance its stablecoin exploration.

Meta declined to be interviewed by Baker.

Meta reached out to several crypto infrastructure companies earlier this year, according to three people familiar with the matter. The discussions are still preliminary, but the focus is on a core advantage of stablecoins over fiat currencies - the ability to pay individuals in different regions at a low cost, while traditional payment methods such as wire transfers incur high fees.

An executive at a crypto infrastructure provider suggested that Meta's subsidiary Instagram could integrate stablecoins to issue small payments of around $100 to creators in different markets, which would be cheaper than paying with fiat currency. The executive described Meta as being in a "learning phase" and added that Meta would remain neutral in choosing the type of stablecoin rather than being tied to a specific provider, such as Circle's USDC. Two other cryptocurrency executives also told Fortune that they had early discussions with Meta about payment scenarios.

Meanwhile, Circle poached Matt Cavin from gaming blockchain company Immutable in March. According to a person familiar with the matter, Cavin is in talks with Meta and other tech giants on related matters. Cavin's LinkedIn profile shows that his current position at Circle is "Head of Tier 1 Strategic Partnerships," but does not explicitly list the partner companies.

Circle declined to comment.

The Explosion of Stablecoins

Meta’s exploration of stablecoins is particularly notable because it was once the most prominent large tech company to explore cryptocurrency integration. In 2019, Meta announced a blockchain initiative that later evolved into Libra, a proposed alliance of companies including Uber and PayPal that planned to launch a stablecoin backed by a basket of fiat currencies. After renaming it Diem, Meta abandoned the project in early 2022 amid regulatory scrutiny. Meta sold Diem’s assets to crypto-friendly bank Silvergate.

Several employees who had worked on the Libra project subsequently founded their own cryptocurrency companies, including David Marcus, the founder of Bitcoin payment infrastructure company Lightspark. Other former Meta employees have redeveloped their own blockchains using Meta’s technology. Most notably, the founders of Aptos and Sui, two blockchains that run on Move, a proprietary programming language developed by Meta.

On Tuesday, Facebook founder and CEO Mark Zuckerberg spoke at the Stripe conference, where he acknowledged Diem’s failure in an onstage conversation with Stripe co-founder John Collison, according to a video obtained by Fortune. “That thing is no longer working,” Zuckerberg said.

When asked about Meta’s tendency to be ahead of technology trends, Zuckerberg said, “Of course, being ahead is a lot more fun than being behind.” But he added, “There are still a lot of areas where we are behind and have to work our way back into the game, and I think we’re doing a good job of that.”