Will Social Media Lead Stablecoins into the Next Era?
On a cold, mid-November day, the Federal Security and Exchange Commission (SEC) of the United States did something very few would think it would allow. It took many by surprise that the SEC would allow social media platform IMVU to essentially mint its own stablecoin, advising that they would “not recommend enforcement action” against the platform. This is a huge swing in the stance they took on Facebook’s proposed Libra Coin a mere couple (actually a bit more, but who’s counting) of months ago. Not only will they allow IMVU to issue its stablecoin, VCOIN, but it will also allow them to do not as a security — a key problem that has previously confounded blockchain backed projects who wanted to pass regulatory practices, such as the Howey Test in the US. While the legal and regulatory details can be a little complex, we wanted to take an alternative look at what this might lay the foundation for.
In today’s world, it is hard to move away from social media, it is as if we are drawn into a Black-Mirror-esque rabbit hole of infinite distractions. While most are engulfed by the endless swipes/scrolls from TikTok, Instagram or Snapchat, in reality there are hundreds if not thousands of smaller, more niche platforms which have a strong and dedicated following. These platforms, like IMVU, may be the perfect testing ground to see whether stablecoins can nestle themselves between a fake “token” economy and real monetary assets exchanging hands. Currently, most social media platforms offer some sort of in-game purchase that users can then use to either power up their hero, buy accessories, or give as gifts to live-streamers. But these tokens are useless outside the individual mobile gaming or social media ecosystem, and just as importantly are not pegged to any real collateral. This forces the social media companies to rely on third party providers like VISA or PayPal in order to allow their users to spend within their platforms. Of course, naturally this comes at a hefty fee both to the individual user, and the overseeing platform. Fortunately, companies like Stably, excel in providing top-notch stablecoin-as-a-service delivery to enterprises of many sizes and industries, now including social media platforms. Through Stably, they receive the technical support to integrate the new currency seamlessly onto their own platforms and also open up their customers to the blockchain economy.
For a company like Facebook, there is probably going to be way too much red tape, eyeballs and scrutiny for them to make a drastic move like this. But for smaller social media platforms and gaming companies like IMVU, this may be a perfect fit for them to provide simpler monetary access to their users. The adoption of stablecoins being used outside the traditional remittance railways, or as an on-ramp into crypto is still rare these days, as both individuals and organizations are still figuring out the best ways to implement stablecoins into their own ecosystems. Ultimately, it is safe to say that widespread adoption of privatized and customized stablecoins is inevitable moving forward, so why not take a minute and look at how you can possibly mint your own stablecoins to use within your ecosystem or plug into the crypto world!
To learn more about the benefits of using stablecoins and how they can improve your business operations as well as position you as a pioneer in the adoption of disruptive technology, reach out to us here. We will gladly walk your organization through the steps of building a stablecoin with our all-in-one solution. Whether it is the code, compliance, distribution, or marketing, we’ve got you covered.
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