Why Meta’s “Zuck Bucks” Might Alienate The Crypto Community

Key Points

• Meta reportedly has plans to roll out a mix of new virtual coins, tokens and NFT features across its platforms.
• The planned digital currency, named “Zuck bucks” by employees, will reportedly not be based on blockchain technology.
• The lack of decentralisation of Meta’s virtual currency is likely to raise concerns within the crypto/Web3 community.

What Happened?

Facebook parent company Meta Platforms’ financial unit, Meta Financial Technologies, plans to introduce a mix of new virtual coins, tokens and Non-Fungible Token (NFT) features across its platforms, reported the Financial Times on Wednesday, citing people familiar with internal discussions.

Having shed more than 30% of its market capitalisation in February after revealing that its apps are declining in popularity relative to competitors such as TikTok, Meta is exploring alternative ways to attract and retain users.

As part of its plans to build a metaverse, Meta has reportedly drawn up plans for the creation of a virtual currency that would power the metaverse’s digital economy. Employees have supposedly dubbed the virtual currency “Zuck bucks”.

Sources speaking to the Financial Times said that this virtual currency would be unlikely to be based on blockchain technology, given recent difficulties faced by Meta to launch a cryptocurrency. Earlier in the year, Meta sold off its diem cryptocurrency project after regulatory authorities in the US refused to give it the go-ahead aid concerns about competition and monetary stability.

Meta staff, in their efforts to find the least regulated way of offering a virtual currency, have reportedly settled on a non-blockchain-based digital token similar to that used in popular children’s game Roblox.

The FT report added that Meta is eyeing the introduction of new so-called “social tokens” or “reputation tokens”, which could allegedly be issued to users within Facebook groups for their contributions. Meta is also said to be mulling “creator coins”, which the FT said might be associated with influencers on Meta’s Instagram platform.

Elsewhere, a pilot for the posting/sharing of Non-Fungible Tokens (NFTs) beginning in May is also reportedly in the work and will allegedly be “quickly followed” by a feature that allows for Facebook group membership based on NFT ownership.

Crypto/Web3 Enthusiasts Unlikely to Respond Positively

While many will be excited by the news that Meta Platforms plans to add features that will boost the nascent NFT economy, reports that Meta’s planned digital currency will not be decentralised and based upon blockchain technology are unlikely to go down well in with the crypto community.

Distrust of centralised power is a defining feature of the crypto community and broader Web3 movement. If the digital currency that powers the economy within Meta’s metaverse isn’t decentralised, this hands Meta enormous power over users, something many Crypto/Web3 enthusiasts may see as dystopian.

They are likely to raise concerns about the risks of arbitrary exclusion from Meta’s virtual economy based on things like political affiliation. They will also raise concerns that the centralised issuer of the virtual currency (in this case Meta) might fall into the same inflationary monetary traps that the issuers of major fiat currencies have.

Meta is reportedly exploring some ideas such as storing user data on a blockchain, and ways to give users direct control over their digital identity, which the Financial Times framed as Meta “embracing Web3 ideals”.

But plans for “social tokens” or “reputation tokens” raise trigger fears that Meta Platforms may be moving towards the promotion of a social credit score system such as that used in China, an idea widely hated within crypto/Web3 circles.

However, Meta reportedly thinks plans for these tokens would allow it to remove itself as a central content moderator whilst handing Facebook communities more power in terms of self-moderation. A reduction of Facebook’s power as a centralised content moderator would probably be greeted positively by most.