Will Facebook have its own cryptocurrency?

ºThe project of the social network is a great step for the normalization of the use of payment tokens or stablecoins, among the general public.

The director of the Postgraduate course in Blockchain and other DLT technologies of the BSM, the UPF management school, Luz Parrondo, considers that the studies that Facebook is doing on blockchain to advance this technology, including a payment system through its WhatsApp platform, could generalize the use of cryptocurrencies as a means of payment if it finally becomes a reality.

"One of the possibilities of the company is to create a payment platform led by the former director of eBay subsidiary PayPal, David Marcus, now responsible for the blockchain division of Facebook," says Parrondo.

"It can make it easier for this whole cryptocurrency payment system to reach people in a massive way. Cryptocurrencies are not being widely used as a means of payment and the general public does not use them, first because of their great volatility and because in general investors and speculators are capitalizing on this innovation ", he points out.

Parrondo points out that between 2017 and 2018 there was a boom in the issuance and sale of tokens, of cryptocurrencies, in a very massive and very uncontrolled way and with a lot of fraud behind because of lack of both knowledge and regulation. Speculation triggered the demand and the hype attracted both high-profile investors and unsuspecting investors.

Different institutions, such as the CNMV, set off alarms and banned ICOS. "Over time, he stresses, the situation has normalized, investors and issuers are more informed, speculative fury has gone down and regulatory bodies have begun to build a still very incipient regulatory framework.

In March, the CNMV allowed the first Security Token Offering (STO), in which financial tokens regulated by this body are issued. On the other hand, the tokens proposed by Facebook are not financial assets, but means of payment. The biggest challenge for the implementation of these tokens is to limit their volatility.

"The stablecoins are cryptocurrencies whose value is linked to a stable asset such as the dollar or the euro, which reduces their volatility and facilitates their function as a means of payment. This is what Facebook is trying to implement, "says Parrondo

"Facebook joined the generalized trend of caution and limited the announcements of ICOs and cryptocurrencies to this day. It seems that this new adventure and greater control over cryptocurrencies has encouraged the giant of social networks to lift this veto. "In this context, Luz Parrondo points out that the Facebook project is a great step towards the normalization of the use of tokens of payment or stablecoins, among the general public.!