Why FIFA Coin is a Bad Idea

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What is FIFA Coin? ⚽️ 

Let’s imagine FIFA Coin.

A token that represents… something to do with FIFA.

Perhaps it gives members voting rights?

Or perhaps it’s a memecoin like Trump’s recent $TRUMP coin — which hit a $70bn valuation at one point.

If you’re wondering why I’m pontificating, Gianni Infantino was at Trump's inaugural Crypto Summit recently (don't ask me why!) and said the following:

"FIFA is very interested in developing a FIFA coin, to do it from here, from America, to conquer the 5 billion soccer fans in the world."

President Trump responded by saying:

"That coin may be worth more than FIFA in the end, it could be quite the coin, actually."

After the announcement, a cryptocurrency called FIFA COIN surged 142,000% and its market capitalisation reached approximately $3 million. However, FIFA COIN is not affiliated with FIFA. Only adding to the confusion of all this.

For those of you who don’t remember, Trump launched his own memecoin a couple months ago called $TRUMP, which has now unsurprisingly crashed and burned.

In hindsight, this may look like what was the top of this crypto market cycle.

In the meantime, President Trump is ushering in a new age for crypto in the U.S.

Banks are now able to engage in crypto services, with stablecoin legislation going through Congress — and he is open about keeping his promise; making the U.S. the home for cryptoassets.

But, first, let’s explore why is FIFA coin a bad idea.

I’ve seen many well-meaning takes on why this could be revolutionary — but the reasoning doesn’t check out.

(1) I saw this pitched by some as a ‘borderless and transparent financial system’ for FIFA

FIFA don’t need their own token for this, and they certainly don’t need to be an openly traded one.

(2) Many also claimed that this could offer real-time, direct financial support to members.

Again, FIFA do not need their own token to do this and could use existing blockchain standards.

Crypto as payments does not make sense when:

1) Stablecoins are here and mainstream
2) Tokens are volatile and big payments would see huge FX slippage
3) You are in a country where your currency is not volatile or particularly inflationary

This would also presume that every single payment is made using this infrastructure, which is of course not going to be the case.

(3) It will conquer the 5bn soccer fans around the world

I mean, I don’t get how a FIFA coin would drive value back to the fans in the current set up of the federation.

It’s also worthwhile noting that fans don’t follow FIFA, they follow their clubs/nations respectively. There isn’t necessarily a direct relationship with the fan that FIFA may think it has.

As Craig Barnwell put it on one of my LinkedIn posts:

There are a bunch of other reasons why this is likely a bad idea but here’s a summary of my thoughts:

• A volatile token in the open market does nothing to make FIFA more egalitarian, more fair or give value to fans.

• There is still room for fraud and the grey areas that FIFA have been accused of — off chain.

• Fans owning a token representing value in a network that FIFA run feels nice, warm and fuzzy — but because it is open and people can trade it, it could do more harm than good.

• If the token was used for payments (bad idea) — does it have liquidity to support huge football related transactions? And what happens if the coin rises / falls large amounts — that’s a risk this industry doesn’t want.

What I would do if I were FIFA?

So let’s take a look at what FIFA could do utilising blockchain, a technology that is having a profound impact on many industries — and will continue to do so.

We’re now finally moving into an era where the speculative side of crypto is seeing real signs of fatigue — in part thanks to the ultimate culmination of the weird wacky wild west; the President of the United States launching a memecoin.

In his latest newsletter, Simon Taylor called this the bifurcation between crypto and onchain markets.

If we take this approach that this technology is going to be used to disrupt business models, increase efficiency, transparency and more, all whilst regulations are coming into place — rather than focus on price action — then let’s explore what that model could look like for FIFA.

I’ve created a graphic that showcases how FIFA could use blockchain.

(1) Governance layer

FIFA is run much like most governments. Each participating nation has a vote at a yearly congress, and there is a FIFA Executive Committee chaired by the president. The presidency is on a 4-year term, and presidents can be re-elected for up to 3 terms in total.

Now the governance layer having some form of tamper and fraud-proof onchain voting, perhaps governed by a non-tradeable FIFA token ($FIFA?) could be interesting.

More transparent, efficient and gives members and fans peace of mind that voting is legitimate.

(2) Infrastructure Layer

FIFA could create their own blockchain (we’ve seen brands like Sony do this with Soneium) or use existing infrastructure.

If there’s mode modularity required then creating a layer 2 chain on existing infrastructure, or a side chain / owned chain on other infrastructure would make sense.

(3) Settlement Layer

This is where I think there’s big potential for crypto within football especially.

B2B payments are hard. But put into the equation; Players, Agents, FIFPRO (Player’s Association), Clubs, National Teams and Public Good Funding — it’s a miracle that anything gets done in football.

Stablecoins now allow for near instant, low fee, global payments. They can also be transparent and made programmable.

For example, every time a player is bought or sold and then registered to a new club, they have to be registered in FIFA’s Transfer Matching System (TMS). Right now this is a multi-step process: