Facebook’s Romance with Crypto Gets More Interesting

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Facebook’s Romance with Crypto Gets More Interesting
Source close to Facebook say the company is making long-term bets on blockchain technology Photo Credit: zdnet

Unconfirmed reports say social media giant Facebook has entered into a partnership with cryptocurrency firm Stellar which issues the XLM digital token. Business Insider reported on Friday, August 10 that Facebook and Stellar had entered talks to form a partnership to build a Facebook variant of the Stellar blockchain.

It is believed that Facebook plans to leverage on blockchain technology to rival the payment systems operated by the big players in the banking sector as Facebook is rumored to be considering venturing into financial services.

An anonymous source told Business Insider that the talks were in the early-stage and there is no indication they will lead to a partnership. The source however noted that Facebook could easily create a payment platform on a distributed ledger like Stellar that would rival that currently in use by the banks.

“They’d be taking the rug out from under the banks, they can add a bank more quickly than a bank could build a social network,” the source said.

But just hours after the Business Insider story Facebook reportedly issued a swift denial of any partnership with Stellar, with a spokesman for the company telling Cheddar that the company is “not engaged in any discussions with Stellar, and we are not considering building on their technology.”

Despite the conflicting reports emerging about with Facebooks partnership with Stellar, the company clearly has major cryptocurrency ambitions as its recent developments have shown.

In May, Facebook announced that it had formed an exploratory team headed by David Marcus the head of Facebook’s messaging app Messenger, to look into the possible applications for a distributed ledger technology.

And in June, several news sources including The Economist reported that Facebook maybe planning to take over digital exchange Coinbase, even as the social media giant announced that it has reversed its earlier decision to ban all cryptocurrency advertisements on its platform.

And just yesterday, Facebook blockchain head David Marcus announced he was quitting his position on the board of U.S. cryptocurrency exchange Coinbase to avoid a conflict of interest. According to Marcus it was the right thing to do, because of the new blockchain group he was leading at Facebook.