Meta Gives Up on Its Crypto Ambitions
Meta stopped supporting NFTs on Instagram a year after launching the beta version. NFT sharing will also be removed for Facebook users. So, what’s happening with the company’s cryptocurrency direction?
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Meta's decision to step back from its development in the crypto sector was first announced on Twitter by Meta Commerce and Fintech lead Stephane Kasriel. He thanked everyone involved and promised to support the NFT community through other means. But what exactly did he mean?
How Meta Pursued Its NFT Direction
Meta's interest in entering the NFT market became public knowledge at the South by Southwest (SXSW) conference held in March 2022. Mark Zuckerberg revealed that users would soon be able to mint NFTs directly on Instagram and share their collections.
In May, the company introduced NFT support on Instagram as part of beta testing. Facebook later joined the project. By July, Meta extended non-fungible token support for users from 100 countries. The social networks later facilitated the issuance and sale of NFTs involving Ethereum, Polygon, and Flow NFT, supporting the works of top NFT photographers like Isaac “Drift” Wright, AI artist Refik Anadol, and others. The Arweave protocol was employed for the decentralized storage of NFTs.
Crypto Projects Meta Closed in Recent Years
The common reaction from followers under Stephane Kasriel's tweet about closing Meta's NFT direction was disappointment, anger, and sarcasm.
You guys quit before you even started. A real shame and undoing a lot of really smart work by great people there
tweeted crypto artist and photographer Dave Krugman.
Meta's withdrawal from non-fungible tokens can be seen in two ways. It's important to remember that between October 2021, when Facebook was renamed to Meta, and December 2022, the tech giant's stock price plummeted by 60%. On one hand, Zuckerberg is striving to make his business as efficient as possible, consistently shutting down projects deemed less promising. On the other hand, many of these projects are related to cryptography.
This reminds us of the decision to abandon the Diem cryptocurrency (formerly known as Libra). Initially, Libra was supposed to be a stablecoin backed by a basket of several currencies and US Treasury securities. The coin was intended to facilitate payments and money transfers through WhatsApp and Facebook Messenger. The project's potential target audience included billions of people.
Zuckerberg's ambitious plans sparked panic among regulators in the US, EU, and other countries around the world. In fact, the potential launch of Libra pushed European officials to draft the MiCA crypto regulations. The European Parliament will vote on this document in the coming weeks.
Worries about monetary sovereignty, financial stability, antitrust laws, and more ultimately doomed Libra. In 2019, Mark Zuckerberg declared that the stablecoin wouldn't launch globally without the approval of US regulators. Over time, the idea lost momentum, Libra was rebranded as Diem, and the project was shuttered in 2022. Interestingly, California-based Silvergate Capital acquired Diem's assets, valued at $200 million, exactly one year before filing for bankruptcy in 2023.
In 2022, Meta also closed its cryptocurrency wallet, Novi (previously known as Calibra). Lacking the support of its proprietary cryptocurrency, Libra/Diem, the crypto wallet project was dead on arrival. Another factor in Novi's closure was the crypto winter. As fate would have it, Libra was grounded just before a bullish trend in the crypto market. If circumstances had been different, Zuckerberg's stablecoins might have become the world's first global currency in 2023.
Will NFTs have a place in Meta's virtual universe?
After dropping the NFT project, the future of using non-fungible tokens in Meta's metaverse is unclear. It was once thought that creators saw NFTs as a vital component of the metaverse – encompassing avatar appearances, clothing, and everyday items. Now, however, Meta has signaled a shift in priorities. Despite laying off 10,000 employees, the company's plans to create a virtual space appear to be intact. Yet, artificial intelligence and associated developments will take center stage in its ecosystem. Meta has not yet shared how this new focus will be implemented in practice.
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