Meta Explores Stablecoin Integration into Its Platforms for Global Payouts, According to a Forbes Report

Meta is holding early-stage discussions with crypto infrastructure firms, marking its return to digital assets after abandoning the Diem project in January 2022 due to regulatory challenges.

This article from Forbes reports that Meta is integrating stablecoins into its platforms for seamless global payouts, continuing its foray into the crypto space.

Key Takeaways:

* Meta is exploring integrating stablecoins into its platforms for global payouts, according to a Forbes report.

* The company is in the early stages of discussions with crypto infrastructure firms about the initiative.

* Meta previously abandoned its Diem project due to regulatory hurdles.

* Ginger Baker, a fintech veteran and former Plaid executive, is spearheading Meta’s new stablecoin initiatives.

* The company is interested in leveraging stablecoins for cross-border payments.

Earlier this year, Meta bid farewell to its Diem project, a consortium-led effort to introduce a stablecoin, marking a setback in the company’s venture into digital assets. However, it seems that Meta is now reigniting its interest in crypto, this time focusing on integrating stablecoins into its vast platforms.

According to a recent report by Forbes, which cites five people familiar with the matter, the social media giant is in the preliminary stages of talks with crypto infrastructure firms about the potential integration of stablecoins. The discussions are still in their nascent phases, and there is no guarantee that they will culminate in any concrete implementations.

The report highlights that Meta is encountering difficulties with traditional wire transfers, particularly for smaller amounts of money, as they come with significant cross-border fees. In contrast, crypto infrastructure providers can process transactions on networks like Stellar or Solana at a fraction of the cost, even for smaller transactions like $100.

Furthermore, an executive from a crypto firm mentioned that Instagram, a subsidiary of Meta, is interested in utilizing stablecoins to pay creators in diverse markets, presenting an effective use case for the technology.

As Meta’s initiative progresses, the company is encountering difficulties with traditional wire transfers, especially for smaller sums of money. These transfers come with hefty cross-border fees. For instance, an account at a major U.S. bank transferring $100 to Canada via wire transfer might incur a fee of $25 to $45, in addition to any fees imposed by the Canadian bank.

In contrast, crypto infrastructure providers can process transactions on networks like Stellar or Solana at a fraction of the cost, even for smaller transactions. An executive from a crypto firm, speaking on the condition of anonymity to disclose private conversations, stated that they had demonstrated to Meta how to move $100 in stablecoins across networks like Stellar or Solana for a total fee of $0.01, encompassing both network and gas fees.

The report also notes that Meta recently appointed Ginger Baker, a fintech veteran and former Plaid executive who serves on the Stellar Development Foundation board, as Vice President of Product. Baker is spearheading Meta’s new initiative and has been meeting with executives from crypto firms to explore potential partnerships.

The integration of stablecoins into its platforms could be a logical step for Meta, considering its vast user base and existing payment infrastructure. It could also enable the company to offer more cost-effective and efficient payment solutions to its users, particularly for cross-border transactions.

However, the initiative would be subject to regulatory approval, which could pose a challenge given the company’s previous experience with the Diem project.

Originally launched in June 2019, the Diem initiative, initially called Libra, was a consortium-led effort to introduce a global digital currency backed by a basket of currencies and held in equal units by the consortium members. The project aimed to provide a more accessible and affordable payment system in an era marked by the high cost of cross-border transactions.

The consortium, which included major companies such as Coinbase, PayPal, and Visa, assembled to oversee the project’s development and management. The initiative encountered significant regulatory scrutiny, particularly in the U.S., where regulators expressed concerns about the project’s potential impact on financial stability and consumer protection.

After a series of setbacks and regulatory challenges, Meta ultimately decided to abandon the Diem project in January 2022. The company sold the remaining assets of the project, including the intellectual property and technology, to Silvergate Bank, a California-based bank with a focus on cryptocurrencies.

The decision to wind down the Diem project marked a turning point for Meta, highlighting the difficulties faced by Big Tech companies as they navigate the evolving landscape of cryptocurrency and the regulatory environment.