Facebook recently announced that the company is lifting some of the previously imposed restrictions on crypto and blockchain advertisements on the social media platform.
Many in the crypto community argue that Facebook promoted crypto would be in direct competition with traditional currencies like the US Dollar and Euro. However, some have been quick to point out that the relaxation in restrictions also coincides with Facebook’s plan to launch its stable coin. Facebook shared the update in a blog post, and the company announced that it is has decided to update its advertising policies and lower restrictions on crypto and blockchain advertising. The post read:
“We’ve listened to feedback and assessed the policy’s effectiveness. While we will still require people to apply to run ads promoting cryptocurrency, starting today, we will narrow this policy to no longer require pre-approval for ads related to blockchain technology, industry news, education or events related to cryptocurrency”.
According to the restrictions imposed by the platform last year, advertisers required prior written approval to advertise any crypto and blockchain related product on the website. The prior approval was set to protect the users from scams and fraudulent activities. While cryptos and blockchain fell on the restriction list, ICO offerings were on the prohibited list, meaning that any advertisement related to them was deleted immediately by the website.
The company has explained in clear words that the prior approval is not required anymore; however, the company still requires advertisers to apply before running ads. The company also explained that complex financial products would still not be allowed to advertise on Facebook and any advertisement related to them would be deleted immediately. The decision was explained in the following words:
“And starting 5 June, we will update our Prohibited Financial Products and Services policy to no longer allow ads promoting contracts for difference (CFDs), complex financial products that are often associated with predatory behavior. These products, due to their complexity, often mislead people. We’ll also continue to ban ads for initial coin offerings (ICOs) as well as ads for binary options”.
The company would also require the text, positioning, images, and targeting of the ads to comply with the community standards and the advertising policies. Facebook has strict guidelines for advertising on its platform; companies are required to run advertisements that are not misleading in any way and don’t promote anything against Facebook’s community standards. The restrictions and oversight in ads related to financial services are taken very seriously, and the new policy would help running ads for education, industry news and events; however, mining software companies and crypto exchanges would still require prior permission.
Facebook’s plan to launch Facebook Coin
The move comes from Facebook as it sets out to launch its stable coin, dubbed as the “Facebook Coin”. The company is reportedly raising $1 billion to serve as collateral for the stable coin. The Wall Street Journal cited the people working on the plan, saying that Facebook has already reached out to payment network companies, Visa and Mastercard for the project. First Data Corp, a payment processing company, was also approached by Facebook for a potential partnership.
The project was a rumor in the Crypto circle for a long time now, the news about the project first appeared in 2018, and the project was known as FB coin back then. Considering the information already released the company is trying to create a payment system that would help people pay through their Facebook profiles. According to Wall Street Journal, the executives have not yet finalized the exact method or the details of the project; however, the initial scope of the project is finalized, and it will involve Facebook’s stable coin backed by cash from Facebook and its partners. The WSJ said:
Facebook is also talking to e-commerce companies and apps about accepting the coin and would seek smaller financial investments from those partners
Dubbed as project Libra, the project is expected to be a stable coin-based payment system associated with a Facebook user’s profile. Facebook is also raising 1 billion dollars from partnering companies to use as collateral for the stable coin. The stable currency would help eliminate the credit card fees and would be safe from volatility, unlike bitcoin and Ethereum.
It is also expected that Facebook would reward its coins to users for viewing ads like a loyalty reward, and people could then trade these tokens to buy stuff over Facebook. The company has put David Marcus, the ex-president of PayPal, as the head of project Libra. Marcus is himself is a die-hard crypto enthusiast and an early investor in bitcoin. David also served on the board of the biggest crypto exchange company, Coinbase but resigned in August 2018 when Facebook started developing its blockchain system. A CNBC report quoted Ryan Gilbert, a partner at Propel Venture Partner:
Under David’s leadership, Facebook is poised to be one of the leading players in crypto and an active acquirer. Who knows, one day an acquisition of Coinbase could be in the cards.
In a Bloomberg Interview Spencer Bogart, called Facebook’s move into the crypto sector as a catalyst for other cryptocurrencies. He said that the launch of the project could cause a large number of user influx into the crypto sector as users would want to try the decentralized tokens. He also said that due to Facebook’s plunge in the area many big financial institutions have started to revamp their timelines and they are moving into the crypto space fast.
MIT Crypto Economist is working for Facebook on their digital coin
Christian Catalini, an MIT professor with research in digital currencies, is working with Facebook on their stable coin project, according to a report. Catalini who received his PhD. in Strategic Management from the University of Toronto, is one of the most prominent crypto economists in the world. Along with the University of Toronto Professor Joshua Greens Catalini in 2018 published a report on the value of crypto tokens which received much applause. Catalini has been on leave from MIT and declined to comment on the alleged rumor, Facebook has also said that they do not disclose personal informatIon of their employees to news organizations.