You know Facebook right? The Social Media platform that has been in our lives for more than 10 years? The platform which hit a billion users as early as 2012? Well according to Bloomberg, Facebook Inc. is working on making a cryptocurrency that will let its users transfer money via the WhatsApp messaging app, focusing first on the remittances market in India.
Bloomberg’s sources say The company (Facebook Inc. is developing a stablecoin (a type of digital currency connected to the U.S. dollar) to minimize volatility. Facebook however, is far from releasing the coin, because it’s still working on the strategy, including a plan for custody assets, or regular currencies that would be held to protect the value of the stablecoin, its sources said.
This is a not really a surprise though, Facebook has long been expected to make a move into financial services. This was expected after the company hired PayPal’s former president David Marcus to run its Messenger app as far back as 2014.
In May of 2018, Marcus became the head of the company’s blockchain initiatives, and while it has not been discussed publicly in detail, Facebook has also been on a hiring spree, and now has about 40 people in its blockchain group, according to employee titles on LinkedIn.
A Facebook spokesman said in a statement; “Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications. We don’t have anything further to share.”
Facebook is reportedly looking at several ways to use blockchain, the technology introduced by Bitcoin that makes it possible to keep shared records of financial transactions on several computers, rather than relying on one big central player like PayPal or Visa.
WhatsApp, the company’s encrypted mobile-messaging app, is popular in India, with more than 200 million users. The country also leads the world in remittances, as people sent $69 billion home to India in 2017 alone, according to the World Bank.
The past year has also seen a boom in crypto projects related to stablecoins (which are digital tokens with a stable value, much like Facebook’s cryptocurrency). Stable.Report, a website which tracks stable tokens, claims that at one point, there were more than 120 ventures related to stablecoins. The concept was created to create a digital coin that would be far easier to use on daily purchases because it would be more stable than currencies like Bitcoin.
Facebook, which has 2.5 billion global users, and more than $40 billion in annual revenue and greater experience navigating regulatory issues, may have a better chance of making a stablecoin that sticks. It would however, be the first large technology company to launch such a project. The company’s relationship with India has been fraught, mainly because some instances of fake news spread through WhatsApp have led to violence there. Facebook still sees tremendous growth opportunity in the country. India has 480 million internet users, second only to China. That number is projected to grow to 737 million by 2022, according to Forrester Research Inc.
Only time will tell if this Cryptocurrency by Facebook (FaceCoin), will stand the test of time, stability and also succeed, where others like BitCoin failed.
