FACEBOOK’S POLICY REVERSAL LEADS TO WIDESPREAD SPECULATION

After an explosive year for ICOs and cryptocurrency in 2017, some regulators and advertisers began to question the legitimacy of certain cryptocurrency fundraisers. While the industry started to feel more scrutiny and oversight from financial regulators and government agencies, it also began to see backlash from major tech companies. First, Facebook and Instagram placed a blanket ban on all cryptocurrency advertisements. Then, Google followed suit and placed very similar stipulations into their advertisement platform. These actions were a result of several fraudulent ICOs and other scenarios that left investors emptyhanded. In this case, the minority ruined it for the majority and several blockchain start-ups were left disadvantaged when trying to advertise their ICOs. However, it seems maybe the tables have turned again…

 

FB Policy Revisions

In late June, Facebook partially reversed its platform-wide ban on cryptocurrency advertising. Customer education in the cryptocurrency market will remain as an important facet to select advertisements as Facebook demonstrated by creating an application process for cryptocurrency and blockchain companies. Here’s what Rob Leathern, one of Facebook’s leading directors had to say on this topic, “Advertisers wanting to run ads for cryptocurrency products and services must submit an application to help us assess their eligibility—including any licenses they have obtained, whether they are traded on a public stock exchange, and other relevant public background on their business. Given these restrictions, not everyone who wants to advertise will be able to do so.”

 

FB’s New Blockchain Department

In May, Facebook created a new department dedicated to blockchain technology. This new team is led by David Marcus who was the previous lead of their Messenger service. It’s worth noting that Marcus was previously the president of PayPal, the global merchant services and payment company. Facebook has not released an official statement on what it plans to do with its new blockchain team. David Marcus was able to add that the company plans to “start from scratch”. Naturally, Facebook’s organizational changes made headlines and ignited conversations and suspicions on what it will do next in the cryptocurrency and blockchain industry.

 

Growing Suspicions

When one of the world’s largest tech companies creates a new blockchain division, people notice. Investors, market experts, financial executives, and conspiracy theorists alike have identified some of the possible outcomes of Facebook’s most recent moves.

  • Facebook’s Own Cryptocurrency:This prediction was inevitable for Facebook especially when theorists examined comments from Mark Zuckerberg like, “One of the most interesting questions in technology right now is about centralization vs decentralization,” and, “With the rise of a small number of big tech companies… many people now believe technology only centralizes power rather than decentralizes it. There are important counter-trends to this – like encryption and cryptocurrency – that take power from centralized systems and put it back into people’s hands,” Zuckerberg wrote. Other industry icons and market executives see this move as an opportunity for Facebook to overcome the challenges that come with multinational payment processing.
  • Coinbase Buyout/Merger: It’s also worth noting that David Marcus, Facebook’s blockchain lead, is also a board member at Coinbase. While this suspicion is more rumour and conspiracy than anything else, it does provide an interesting outcome that could drastically change the market as we know it. Coinbase is currently serving 10 million customers but CEO Brian Armstronghas set a goal of one billion. Facebook’s user total is roughly two billion, a market opportunity rare to many industries.

 

The common sentiment around Facebook’s blockchain interest is that the tech giant is simply evaluating new technologies for its current business operations – specifically data storage, privacy, and advertising. IBM blockchain chief, Bridget van Kralingen, touched on this by adding that blockchain technology could provide several solutions for privacy concerned individuals. Kralingen furthermore said, “I think it’s a technology that fits very well with some of the business model challenges that they’re actually facing, and I think they’re very right to take this very seriously.”

 

Market Ripple Effect

What Facebook plans to do with its blockchain department remains a mystery as the company has offered little information. Regardless of what the planned expansion may be, this recent move by Facebook has been one that is beneficial to the blockchain and cryptocurrency community. In the last year, we have seen more and more major corporations take the plunge into blockchain technology waters; Facebook’s initiative to do so as well tends to strengthen the case for distributed ledger technology. As members of the blockchain community, we can only hope the recent advertising policy changes help to expand blockchain and cryptocurrency education and presence.

Image source: Shutterstock
David Eisenhauer
David Eisenhauer

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