Facebook is speaking with several crypto projects as it explores ways it can use blockchain technology.
In recent months, Facebook’s blockchain team, led by the former PayPal executive David Marcus, has met with the open-source payments-technology company Stellar about some of those opportunities, people familiar with the talks told Business Insider.
While the talks were early-stage and there is no indication they will lead to a partnership, they could shed light on Facebook’s ambitions to push into finance and take on big banks.
For example, if Facebook wanted to rival the big banks’ payments networks, it could leverage blockchain technology to do so, said a person familiar with the firm’s talks with Stellar.
The speed of certain blockchains over traditional financial pipes-and-plumbing is one of the most cited benefits of the red-hot technology. A JPMorgan research note said a transaction on Ripple’s network took four seconds versus three to five days for traditional banking systems to process a transaction.
Facebook already appears to be taking other steps to break into banking, reportedly considering showing users their bank balance or fraud alerts.
A Stellar insider told Business Insider it would make sense for Facebook to record payment transactions on a distributed ledger like Stellar. Other merchants could then connect to a Stellar-based ledger. Such a platform could rival the Swift payments network that connects banks and allows for money transfers.
“They’d be taking the rug out from under the banks,” the person said. “They can add a bank more quickly than a bank could build a social network.”
Sources say Facebook and Stellar have spoken about the firm potentially forking the main Stellar network as part of its blockchain efforts. A crypto fork is when a blockchain splits into two — both have the same underpinnings but can be managed differently moving forward.
Facebook is known for working with other open-source technologies; it’s one of the largest maintainers of React, an open-source technology language. It could, in theory, fork an existing blockchain as opposed to building its own.
A representative for Facebook disputed that the company would build on Stellar’s technology. A spokeswoman for Stellar declined to comment.
The price of Stellar Lumens rose about 8% following Business Insider’s report on the talks between Facebook and Stellar, according to CoinMarketCap.
‘Improve the lives of billions of people around the world’
A source close to Facebook’s blockchain business said the company was making a long-term bet on blockchain that would most likely resemble its investments in artificial intelligence. Rather than targeting a specific vertical, such as payments, Facebook’s blockchain group would provide a foundation from which the firm will be able to target an array of possible opportunities.
A recent Facebook job ad reflects this notion, saying the blockchain group “is a startup within Facebook, with a vision to make blockchain technology work at Facebook scale and improve the lives of billions of people around the world.”
The firm is also looking to expand its crypto group, according to job ads. One position the firm is looking to fill is a manager for a newly created software engineer team within the blockchain group.
Facebook is also hiring a blockchain public-policy manager to analyze policy issues relating to blockchain and advise product and business teams on those developments.
Already, Shashwat Gupta, a former product manager for Samsung Pay, joined as a product strategist for blockchain in May. “Blockchain” was removed from his LinkedIn profile after Business Insider talked to a Facebook spokesman.
And Evan Cheng was promoted to head of engineering for blockchain in June.
The duo joined Facebook employees including Kevin Weil, a vice president of product, and James Everingham, a head of engineering.