According to current statistics, Facebook has more than 500 million ACTIVE users, 50% of whom use Facebook everyday, 200 million of these users interact via mobile daily, and around half of the Top sites in the world are integrated with Facebook. PayPal recently announced integration of micropayments into Facebook's platform. Facebook also announced that you will shortly be able to buy Facebook Credits from Walmart and BestBuy.
In the midst of all of this is a rapidly spiraling US dollar, with increasing competition from the Yen, Euro and hedge currencies like the AUD. The Fed's QE2 moves tend to bring even more uncertainty to the USD in the near future. With questions over the future of the Yuan/RMB and the huge foreign reserves of USD in China, the uncertainty over the USD as a currency for the longer-term is simply building.
Putting these facts together seems innocuous, but with a bit of imagination the future of Facebook Credits (or another such virtual currency) could change the way we think about, value and utilize currency globally. The fact is, today physical cash carries less and less value. Recently at the SIBOS Innotribe sessions we discussed "The Future of Money" where Venessa Miemis presented a compelling video that really triggers thinking around how currency will be defined as mobility, behavior, virtual trade, transparency and interactions start to impact.
"The so-called 'QQ' coin--issued by Tencent, China's largest instant-messaging service provider--has become so popular that the country's central bank is worried that it could affect the value of the Yuan. Li Chao, spokesman and director of the General Office of the People's Bank of China, has expressed his concern in the Chinese media and announced that the central bank will draft regulations next year governing virtual transactions. Public prosecutor Yang Tao issued this warning: 'The QQ coin is challenging the status of the renminbi [yuan] as the only legitimate currency in China.' " - AsiaTimes Online, December 5, 2008
Facebook Credit announces a tie up with Apple for the iPhone 5 (NFC enabled) where you can use your Facebook credits for real-world purchases at the Point-of-Sale at participating retailers like WalMart, Best Buy, etc. Suddenly those Facebook Credit gift vouchers seem a lot more valuable.
Facebook, PayPal, Western Union and NCR tie-up to announce a global network of cash-in/cash-out points for Facebook Credits for Person-to-Person payments. You can now send Facebook Credits anywhere in the world and cash them out at a participating physical location or at a local ATM in your home currency.
Maybe, but either one of these scenarios, or something close to these are entirely possible with the consumer power that Facebook has with 500 million 'friends' behind them. Turning that into a credible, virtual currency that bridges the gaps between mobile, online and the real-world is not at all far fetched.
"The strength of a nation's currency is based on the strength of that nation's economy" - President Nixon, August 15, 1971
It is possible, that the economy that Facebook, off the back of mobile-enabled P2P payments or a common virtual currency for the online world, could create a virtual economy second to none.
I could be wrong - but The Future of Money has to be considered in the light of the impact of digital influence. Country boundaries and the value of a local note largely lose their import if a virtual currency can be credibly tradable across different modalities and that translates to the ability to trade goods and services in the real world. 500 million Facebook users could tip the balance here...
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