Chris Skinner's blog

Shaping the future of finance

Will Facebook become the world’s central bank?

Chris Skinner Author Avatar

I got a large number of pings over the weekend to read and comment on an article on Medium by Lance Ng headlined: Facebook Plans to Become World’s Biggest Central Bank?

It is a conjectured article that takes the story from The New York Times discussing Facebook creating its own cryptocurrency (Facebook and Telegram Are Hoping to Succeed Where Bitcoin Failed).

The NYT article is co-written by Nathaniel Popper, the author of Digital Gold: The Untold Story of Bitcoin, and discusses how building cryptocurrency into WhatsApp and other services could make digital currencies go global.

The most anticipated but secretive project is underway at Facebook. The company is working on a coin that users of WhatsApp, which Facebook owns, could send to friends and family instantly, said five people briefed on the effort who spoke on the condition of anonymity because of confidentiality agreements. The Facebook project is far enough along that the social networking giant has held conversations with cryptocurrency exchanges about selling the Facebook coin to consumers, said four people briefed on the negotiations …

Facebook has more than 50 engineers working on its project, three people familiar with the effort said. An industry website, The Block, has been keeping track of the steady flow of new job listings for the Facebook project. The Facebook effort, which is being run by a former president of PayPal, David Marcus, started last year …

And Lance is very enthusiastic:

Between Messenger, WhatsApp and Instagram, which Facebook owns, there are a collective 2.7 billion users. If Facebook decides to back the value of its own digital coin with a basket of foreign currencies, then it could potentially become the largest central bank in the world — because that’s what central banks do; print money backed by their country’s economy and foreign currency reserves.

Not only will this become monumental in world economic history, it is also going to become a serious and rapid threat for the existing giants of the finance industry.

However, the NYT authors have a note of caution:

The messaging companies are likely to face many of the same regulatory and technological hurdles that have kept Bitcoin from going mainstream. The lack of a central authority over cryptocurrencies — a government or a bank — has made them useful to criminals and scammers, and the designs of the computer networks that manage them make it hard to handle significant numbers of transactions.

My own take is that it could succeed as a transactional system, but not as a store of value.

I say this as I am sure that folks might take to ducks like water if they have the ability to send money around the world to friends via WhatsApp, Instagram and Messenger for near free. That is a threat to firms like Western Union and Transferwise.

But, as a store of value, Facebook and its subsidiaries have a huge issue with trust. They have none. Their abuse of customer privacy and customer data is widely reported in the real media ...

... and their promotion of fake news is clearly a problem. Now I know that Facebook is working on those issues – just read Mark Zuckerberg’s privacy manifesto - but many, including me, think that’s just a PR stunt to prop up Facebook’s ailing share price.

And the core issue here is Facebook itself and its go-to-market model. Its core business structure is to leverage customer data for sales. That’s why it abuses privacy and customer activity, and why it is becoming more and more irrelevant.

Personally, I am fed up with Facebook. Most of the messaging I get is from people I don’t know asking me to look at stuff I don’t want to see. That’s why its influence is declining:

“In 2016, Facebook accounted for more than half (53.0%) of time spent with social. But the figure has been on a downward trajectory, heading toward 44.6% in 2019”, according to a forecast by emarketer

And it faces serious questions about its future viability from a regulatory perspective.

And, in fact, it is that last point that raises the most serious barrier to Facebook doing anything more than a digital currency transaction engine for messaging systems. After all, banks have five times more regulation than technology companies for a reason.


Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

Digital Transformation Programme

Learn directly from from one of the most influential people in technology, gain insights from the world's most innovative companies, and build a global network.

Top 50 Global Thought Leaders and Influencers on FinTech 2022

Chris Skinner
Commentator, CEO of The Finanser and best-selling author at The Finanser

Thinkers360 Thought Leader

Contact Me

Best Financial Services Blogger

Chris’s latest book

Chris Skinner’s ‘Digital For Good’ Book Launch Event – CFTE

Global Awards

Best CEO of the Year UK 2022

Best Digital Finance Provider of the Year UK 2022

Best Financial Markets Adviser of the Year UK 2022

Portal to the Knowledge Base of the Financial Services Club UK 2022

Financial Markets Advisor of the Year UK 2022

Corporate America Today Annual Awards

Best Financial Markets Adviser of the Year UK 2022

Portal to the Knowledge Base of the Financial Services Club UK 2022

Financial Markets Advisor of the Year UK 2022

Nominee of MAD33 2021

Kids creating the future bank | TEDxAthens

Join me on Linkedin

Follow Me on Twitter!

UK’s most influential person in technology

Captain Cake and the Candy Crew

Captain Cake Winner of a Golden Mom’s Choice Award


TheNextWeb – #tnw

Learn more about Chris

About Chris Skinner

Presentation at ZBP, September 2020, Warsaw, Poland

Alex at the Financial Services

Gaping Void's Hugh MacLeod worked with the Finanser