META IS MAKING ZUCK BUCKS: WHAT EXACTLY IS IT?

After giving up on its cryptocurrency venture named Diem, Meta, the parent company of Facebook and Instagram, reportedly plans to introduce a virtual currency to its apps, internally dubbed “Zuck Bucks.”

According to a report by Financial Times, the social media conglomerate aims to use the virtual token for rewarding creators, lending, and other financial services.

Even though it’s still in the early stages, the news of Zuck Bucks comes at a time as Meta is expanding its services around the metaverse, a virtual environment where people interact, work and play.

Let’s find out more about the virtual currency, Zuck Bucks:

What is Zuck Bucks?

Seemingly named for Meta founder, chairman, and CEO Mark Zuckerberg, Zuck Bucks are unlikely to be a cryptocurrency.

The report by Financial Times suggests that Meta is possibly leaning towards in-app tokens that the company would centrally control.

An example of such currency is Robux, used in the popular children’s game Roblox or V-Bucks in Fortnite.

As per the report, Meta’s virtual tokens are intended for the metaverse and may not be based on blockchain technology.

Like Roblox, Zuck Bucks could give Meta a new revenue channel and control over transactions in its apps, including Facebook, Instagram, WhatsApp, and the Meta Quest virtual reality platform.

The in-app tokens could probably be used to pay creators on Instagram or reward people who make meaningful contributions to Facebook groups.

The company is also looking into traditional financial services like offering loans to small businesses.

According to a report by CNET, a Meta spokesperson said the company continuously considers new products.
“As a company, we are focused on building for the metaverse, including what payments and financial services might look like.”

Not Facebook’s first venture into financial services

In its early years, the social media platform Facebook launched Credits in 2009 to facilitate in-app purchases in games hosted on the website, like FarmVille.

Even though it was initially successful, Facebook Credits was shut down after four years when international payments became a headache due to fluctuating exchange rates.

The company’s more recent cryptocurrency efforts collapsed after regulators halted the platform’s bid to launch a stablecoin linked with the US dollar.

In 2019, Facebook announced Libra, a cryptocurrency that was to be backed by several international currencies; however, it faced criticism from politicians and central bankers that it would undermine existing currencies.

As several of its partners left the project, Facebook rebranded Libra to Diem in late 2020. After several congressional hearings and high-profile staff departures, the cryptocurrency project was shut down.

IN A PRESS RELEASE, Diem CEO Stuart Levey said that the decision to sell was made after it “became clear from our dialogue with federal regulators that the project could not move ahead.”

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