On the heels of Facebook’s u-turn on cryptocurrency ads, there’s been speculation over a possible Coinbase takeover by the social media giant.
The move to amend the blanket ban was widely applauded by significant players within the industry, with the likes of UK managing director of eToro, Iqbal Gandham saying “Customer safety and education about the market should remain a priority, but a blanket ban is a poor approach to new ideas.”
Now that the dust has settled on the policy change, there’s perhaps a more significant implication for those involved in the crypto space, as Facebook’s ambitions when it comes to the cryptocurrency space are now under scrutiny.
Only last month they announced some fundamental management restructuring, which comprised the commencement of an exploratory blockchain group, reporting directly to Facebook CTO, Mike Schroepfer.
Heading that group is David Marcus, a Coinbase board member.
The Economist reported rumors of a Coinbase takeover and Facebook’s interest at the start of this month, and if you think about it, it makes perfect sense.
A great point of entry
Blockchain expert and co-founder at Orvium, Manuel Martin said; “While yesterday’s announcement does not mean that the rumors are necessarily true, it is clear that Facebook is aware of the potential of crypto projects.
After the implementation of the initial ban period on their platform for crypto project advertisements, they are now reversing that ban, altering the situation. Taking this into account, it is very likely that they are considering additional ways to enter more directly into the crypto market.
Acquiring Coinbase would be a great entry point because it is one of the key reference platforms for digital currency exchange in the world. I firmly believe that we will hear more rumors and see other tech giants taking part in the blockchain.”
At the time of writing Facebook has around 2 billion active users, which would mean that any cryptocurrency platform that they purchased or developed would almost instantly have the kind of reach of which most already in the space can only fantasize.
Imagine how a so-called “Facebook coin” would be received? The instant credibility would be game-changing.
Gianluca Giancola, Co-founder and Head of Design & UX at blockchain-powered loyalty ecosystem qiibee, commented –
“Although there is currently no evidence to support the rumors that Facebook will buy Coinbase, the reversal of the crypto ad ban this week is a strategic move for the platform into the blockchain space.
After announcing the executive blockchain team back in May and the appointment of Coinbase’s David Marcus to lead the division, we wouldn’t be surprised if a takeover is in the works. Considering the numerous scandals Facebook has endured in recent months with regards to data protection, this steer into crypto adoption would be a wise move.
Acquiring Coinbase would significantly boost Facebook’s value, and utility, as well as help restore lost credibility among users and add some much-needed legitimacy to the crypto space.
Despite many large corporations venturing into blockchain in recent months, on varying levels, we are yet to see a behemoth such as Facebook fully engage with the technology.”
Centralization vs decentralization
As far back as January, Facebook co-founder Mark Zuckerberg posted an entry on his Facebook page discussing the potential behind decentralized currencies, saying –
“One of the most interesting questions in technology right now is about centralization vs. decentralization.
With the rise of a small number of big tech companies… many people now believe technology only centralizes power rather than decentralizes it.
There are important counter-trends to this – like encryption and cryptocurrency – that take power from centralized systems and put it back into people’s hands.”
Zuckerberg concluded his post by saying he was “interested to go deeper,” and figure out “how best to use them” through the Facebook platform.
Although the Coinbase takeover is nothing more than a rumor at the moment, all eyes within the crypto space will be looking on to see how this plays out.
Lover of all things crypto, blockchain and AI, professional tech scribe & part of the editorial team at Crypto Disrupt.