According to an unconfirmed, recent report by Business Insider that cites insiders at Stellar, Facebook is interested in leveraging blockchain technologies to potentially undercut payment networks, as well as the general banking industry. The idea is that Facebook’s massive user base would enable them to quickly grab market share if they were to move into payments or even a decentralized banking solution.
“They’d be taking the rug out from under the banks. They can add a bank more quickly than a bank could build a social network,” a Stellar insider told Business Insider.
Sources say that Facebook has even expressed interest in potentially forking the main Stellar network to further build out its blockchain platform. This would make Facebook the second major company to build on the underlying Stellar blockchain infrastructure after IBM revealed in July that it is working with Stronghold, a blockchain startup backed by Freestyle Capital, to co-develop an FDIC-insured stablecoin pegged to the U.S. dollar and built on the Stellar blockchain.
The timing of this report is interesting, as Facebook reportedly asked several U.S. banks for customer information, including card transactions and account balances, as part of a move to build out its Messenger application. It is unclear at this time if the two efforts are related, but that quality of data could undoubtedly help Facebook build its decentralized banking solutions.
This news also comes the same day as David Marcus, the executive in charge of Facebook’s experimental blockchain group, stepped down from Coinbase’s board of directors in order to avoid a potential conflict of interest.
These latest reports suggest that Facebook is fully invested in its blockchain initiative and that it is likely soon to be in direct competition with the major companies already functioning within the crypto industry.
There is no indication as to what other cryptocurrencies Facebook has met with at this time. The price of Stellar jumped 10% to $0.2369 on the news but has since pulled back to $0.2318.
Update: A recent Tweet by former Business Insider reporter Alex Heath claims Facebook reached out to him with the following statement: “We are not engaged in any discussions with Stellar, and we are not considering building on their technology.” There is no indication at this time to the validity of these statements, but it is important to note that the above article references a report that was not yet confirmed by Facebook.
More: Facebook has talked to crypto project Stellar about its blockchain efforts — and it hints at how the social media giant could take on Wall Street
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Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.