Meta is done with Diem, but not with blockchain payments

Meta is done with Diem, but not with blockchain payments
Mark Zuckerberg is quite done with blockchain just yetBI India
  • Meta’s annual SEC filing says that the Novi wallet and more may still use blockchain-based payments.
  • Stablecoins like USDC might be used for payments on Meta’s future products.
  • Meta’s metaverse platforms are also supposed to incorporate NFTs.
Meta’s cryptocurrency project Diem is in the ground and its intellectual property has been sold. But CEO Mark Zuckerberg isn't quite done with blockchain-based payments just yet.

In its annual 10-K filing with the US Securities and Exchange Commission (SEC), Meta highlighted that future initiatives like the Novi digital wallet might use “blockchain-based assets” like the stablecoin USDP, which is issued by the Paxos Trust Company.

Further, the company said that its future initiative “to support commerce in the metaverse” may use blockchain-based assets in digital payments.

“Use of blockchain-based assets in payments are a relatively new and unproven technology, and the laws and regulations surrounding them are uncertain and evolving,”

Excerpt from Meta’s SEC filing

Meta knows it’s going to be a bumpy ride

When Diem was killed, many wondered what digital payment mechanisms Meta would use for its future virtual platforms. In October, while rebranding Facebook to Meta, Zuckerberg had said that the company would be pumping in significant resources into Oculus and future metaverse platforms. He even showcased meeting rooms, games and more that were designed for these virtual spaces.

In its SEC filing, Meta noted that the company expects scrutiny from governments and regulators for its future digital payments systems. This, along with how the market accepts these new payments systems, means that Meta is uncertain about whether its future payments systems will be launched in time, or even if they will be launched at all.

The company said that it is “participating in responses” to government inquiries relating to its digital payments and said that adverse actions from regulators and governments could “harm” its business.

Government acceptance is a key

The SEC filing, which comes days after Meta reported lacklustre results for the fourth quarter of 2021, also reiterated some of the concerns Zuckerberg had highlighted during the company’s earnings call earlier this month.

Meta stated that Facebook’s user growth in countries like India had been limited by growing data prices of prepaid mobile plans. However, a drop in daily active users from the US was seen as well.

Overall, Zuckerberg pointed the finger at Apple’s new App Tracking Transparency rules for the dip. According to him, since the new rules block companies from tracking user activity across the Internet, it affected Facebook’s ability to target ads online.

In his October address, Zuckerberg had indirectly postulated that one of the reasons for Meta’s focus on the metaverse was to get out from under companies like Apple’s rules. “The metaverse will not be created by one company. It will be built by creators and developers making new experiences and digital items that are interoperable and unlock a massively larger creative economy than the one constrained by today’s platforms and their policies,” he said in a letter at the time.

This means, Diem or not, digital payments in the metaverse will be an integral part of Meta’s future products. The company has also been exploring non-fungible tokens (NFTs) through platforms like Instagram, which gives it even more onus to incorporate blockchain-based payments into its future products.

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