Zuckerberg suddenly restarts the stablecoin project

Written by: Leo Schwartz and Ben Weiss

Compiled by: Liam

In 2019, Meta announced a bold plan: to launch a new stablecoin that could operate on Facebook, WhatsApp, and many other digital platforms. However, after facing strong opposition from the U.S. Congress and other legislative bodies, the company ultimately abandoned the plan. Now, Meta is once again testing the waters in the stablecoin space. According to five insiders, the company is in discussions with a cryptocurrency firm about launching a stablecoin as a means of managing payments, and has hired a product vice president with stablecoin experience to drive related discussions. The identities of these five insiders are known to Fortune magazine, but they requested anonymity to discuss the business secret.

Meta declined to comment.

Stablecoins are a type of non-volatile cryptocurrency pegged to the US dollar, which has long been a focus of attention in the blockchain industry. However, the Biden administration's tough anti-cryptocurrency policies have limited their mainstream application. Nevertheless, the election of Donald Trump as president last November and the recent acquisition of the stablecoin startup Bridge by payment giant Stripe for $1.1 billion have propelled the broader application of stablecoins in the financial sector, especially as a tool for cross-border payments.

In the past month, Visa announced a partnership with stablecoin infrastructure provider Bridge, financial company Fidelity revealed that it is developing its own stablecoin, and Stripe launched new financial accounts based on stablecoins.

Meta's interest in this technology reflects the growing attention of non-crypto companies towards stablecoins, especially as congressional lawmakers debate two bills aimed at regulating stablecoins, which seek to end years of regulatory uncertainty.

Meta's cryptocurrency plan

According to her LinkedIn profile, Ginger Baker joined Meta as Vice President of Product in January this year, focusing on the fintech and payments sector. She previously served as an executive at the fintech company Plaid and is still a board member of the cryptocurrency company Stellar Development Foundation, which manages a Layer-1 blockchain. According to a knowledgeable source, she is assisting Meta in advancing its work on stablecoin exploration.

Meta declined Baker's request for an interview.

According to three insiders, Meta reached out to several crypto infrastructure companies earlier this year. Currently, discussions are still in the preliminary stages, with a focus on a key advantage of stablecoins over fiat currencies—being able to make payments to individuals in different regions at lower costs, whereas traditional payment methods like wire transfers incur high fees.

An executive from a crypto infrastructure provider suggested that Meta's subsidiary Instagram could integrate stablecoins to make small payments of around $100 to creators in different markets, which would incur lower fees than using fiat currency payments. The executive described that Meta is currently in a "learning phase" and added that Meta will remain neutral when selecting the type of stablecoin, rather than being tied to a specific provider, such as Circle's USDC. Two other cryptocurrency executives also revealed to Fortune magazine that they have had early discussions with Meta regarding payment scenarios.

At the same time, Circle poached Matt Cavin from the gaming blockchain company Immutable in March. According to a source familiar with the matter, Cavin is in discussions with Meta and other tech giants regarding related matters. Cavin's LinkedIn profile indicates that his current position at Circle is "Head of Strategic Partnerships, Level 1," but does not specify the partner companies.

Circle declined to comment.

Explosive growth of stablecoins

Meta's exploration of stablecoins is particularly noteworthy, as it was the most well-known large tech company to explore the integration of cryptocurrencies. In 2019, Meta announced a blockchain initiative that later evolved into Libra, a proposed consortium made up of companies including Uber and PayPal, which planned to launch a stablecoin backed by a basket of fiat currencies. After rebranding to Diem, Meta abandoned the project in early 2022 under regulatory scrutiny. Meta sold Diem's assets to the cryptocurrency-friendly bank SilverGate.io.

Several employees who participated in the Libra project later founded their own cryptocurrency companies, including David Marcus, the founder of the Bitcoin payment infrastructure company Lightspark. Other former Meta employees also leveraged Meta's technology to redevelop their own blockchains. Most notably, the founders of Aptos and Sui, both of which run on the proprietary programming language Move developed by Meta.

On Tuesday, Facebook founder and CEO Mark Zuckerberg delivered a speech at the Stripe conference, where he acknowledged the failure of Diem during a stage dialogue with Stripe co-founder John Collison, according to a video obtained by Fortune. Zuckerberg stated, "That thing is no longer working."

When asked about Meta's tendency to often be at the forefront of technological trends, Zuckerberg stated, "Of course, being ahead is much more interesting than being behind." But he added, "There are still many areas where we are behind and need to work hard to get back in the game, and I think we are doing quite well on that front."