Facebook Expected to Release Crypto Coin by the End of June
The new digital asset will be launched by a specially created foundation, and may be used as compensation within the company.
Facebook may announce the launch of its digital coin by the end of June, reported The Information. The social media company, however, may choose to build an outside controlling entity for its crypto coin efforts, to match the requirements of regulators. Thus, the de facto leading media giant is making forays into the financial sector, at least indirectly.
The Facebook digital asset still has no official name. The company may attempt popularization through an ATM network. Additionally, the blockchain itself may be secured by third parties, for a steep fee as high as $10 million per participant.
The latest information suggests Facebook will attempt a form of delegated proof-of-stake, though more restrictive compared to other networks where participation is either voluntary or based on elected representatives.
Facebook has been trying to branch into payments in the past year, though a digital asset was not the immediate answer. Other expectations about Facebook’s asset is that it would be pegged to the US dollar in some form, to avoid fluctuations in price.
Facebook reaches more than two billion users, and building a payment system would potentially become a significant source of revenues. In the past, Facebook has been skeptical about digital assets, going as far as banning crypto-related ads. Later, the social network reintroduced some apps. But at least some Facebook-based advertising was related to scams and risky digital assets.
The leading social media site may also achieve mainstream adoption where other crypto-related social media have failed. In the crypto space, social media projects like Steemit had to cut most of their employees during the bear market. Other tokens for social media, like Status Network (SNT), failed to pick up, except for speculation.
One of the largest projects, the Kik ecosystem using the KIN token, is currently facing a lawsuit from the SEC. Months of investigation later, the SEC believes that the KIN digital asset was, in fact, sale of an unregistered security.
It is still uncertain how Facebook would issue and distribute its digital coin. One of the reasons that Kik was taken to court was the fact that the KIN asset was used for fundraising and promised returns in the future.