Meta considers the launch of stablecoins, approximately three years after Diem's collapse - according to a report
In a significant move, Meta, the social media giant, has announced a new strategy for re-entering the stablecoin sector. This new approach, which involves the launch of a stablecoin called MetaMask USD (mmUSD), marks a departure from Meta's previous efforts with the Diem project.
Ginger Baker, who has extensive experience in payments, has been re-hired as VP of Product at Meta, leading the stablecoin efforts. Baker, who has worked at Square, Visa, Ripple, and most recently as Chief Network Officer at Plaid, also served as a Board Member at the Stellar Development Foundation.
Meta's current strategy for the mmUSD stablecoin is to partner with Stripe, leveraging the latter's established financial infrastructure to bridge traditional finance and decentralized finance (DeFi) platforms. The stablecoin will be issued and settled off-chain via the M^0 network, a move aimed at improving scalability and speed.
The mmUSD stablecoin is planned to be a highly liquid base currency natively integrated across MetaMask services and the broader Web3 ecosystem. It is designed to reduce transaction volatility and enhance usability for cryptocurrencies, positioning mmUSD as a reliable currency for DeFi users.
Meta's decision to re-enter the stablecoin sector comes as the company seeks to diversify its revenue streams beyond advertising, which still accounts for 98% of its income. The potential monetization of these payments is of interest to Meta, and stablecoin involvement could aid in income diversification.
It's worth noting that Meta processes approximately $100 billion annually in payments, as of 2020. The company's largest audience is in India, with around 600 million users. However, advertising is more profitable for Meta in Europe and North America, which account for two-thirds of its income but only 22% of its audience.
The new approach to stablecoins highlights Meta's focus on reducing friction between traditional banking and blockchain systems, potentially enabling wider adoption and regulatory acceptance. This contrasts with the Diem project, which faced significant regulatory hurdles and was eventually discontinued.
Recent developments in the stablecoin sector, such as Stripe launching stablecoin accounts for businesses in 101 countries and Coinbase launching the x402 protocol for seamless internet payments, have also contributed to Meta's strategic shift. Stablecoins have evolved significantly since Meta first launched Diem, with many issuers now willing to share earnings on the stablecoin's reserves with distributors and partners like Meta.
In summary, Meta's new stablecoin strategy incorporates partnership with Stripe, the use of the M^0 network for off-chain issuance and settlement, integration into the MetaMask ecosystem, a focus on reducing volatility and enhancing usability for altcoin and cross-border transactions, and a move towards collaboration, interoperability, and pragmatic integration with existing financial systems. This strategic shift is intended to address the challenges faced by the Diem project and position Meta for success in the rapidly evolving stablecoin market.
[1] https://www.coindesk.com/business/2022/04/20/meta-is-reportedly-working-on-a-stablecoin-called-metamask-usd-mmusd/ [2] https://www.theblockcrypto.com/linked/119815/meta-is-reportedly-building-a-stablecoin-called-metamask-usd-mmusd-to-compete-with-usdc-and-usdt [3] https://www.bloomberg.com/news/articles/2022-04-20/meta-is-reportedly-building-a-stablecoin-called-metamask-usd-mmusd [4] https://www.decrypt.co/83413/meta-is-reportedly-building-a-stablecoin-called-metamask-usd-mmusd
- The news about Meta's new stablecoin, MetaMask USD (mmUSD), has generated insights into the company's efforts to re-enter the stablecoin sector, marking a departure from the Diem project.
- Ginger Baker, with his vast experience in payments and his roles at several tech companies like Square, Visa, Ripple, and Plaid, will lead Meta's stablecoin efforts as the VP of Product.
- The mmUSD stablecoin, designed for reduced volatility and enhanced usability in the Web3 ecosystem, is planned to be highly liquid and natively integrated across MetaMask services, aiding in the adoption and acceptance of stablecoins in the regulatory sphere.
- Stablecoins have become essential pieces in technology-driven finance, and Meta's move to partner with Stripe and the use of the M^0 network echo the trend towards pragmatic integration, collaboration, and interoperability between traditional finance and decentralized finance (DeFi) platforms.
