Facebook Inc. an American online social media and networking company is reportedly working on a cryptocurrency allowing its users to transfer money on its other company WhatsApp, focusing on the remittances market across India, Bloomberg reported.
The most popular social media site Facebook will develop a stablecoin — a kind of digital currency pegged to the US dollar— to reduce volatility, said the people who are familiar with the development.
“Facebook 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,” the people said.
Facebook has long been supposed to make a move in financial services, after hiring former PayPal president David Marcus to run its Messenger app in the year 2014. It is to be noted that Marcus became the head of the company’s blockchain initiatives in May, which haven’t been discussed publicly in detail.
According to reports, Facebook has been on a hiring spree and now has almost 40 people in its blockchain group.
Confirming the news, Facebook’s spokesperson stated, “Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology.”
Though the report also suggests that Facebook is not releasing the cryptocurrency anytime soon since it is still on the initial stage and is working on the strategy. It includes custody assets or regular currencies plan with the intention to protect the value of the stablecoin.
He said, “This new small team is exploring many different applications. We don’t have anything further to share.”
WhatsApp the messaging application is one of the most popular chatting application in India having more than 200 million users. The country also leads the world in remittances — people sent $69 billion home to India in 2017, the World Bank said this year.
In the past, we have witnessed a boom in crypto projects related to stablecoins. At one point, there were more than 120 ventures related to this theme, according to a website that tracks stable tokens. The concept was conceptualised 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.
Perhaps the most high-profile stablecoin to date, Tether, has also been surrounded by controversy. While Tether’s creators said that each of its tokens is backed by one U.S. dollar, the company’s refusal to be audited has raised questions about whether that’s the case.
Apparently, Facebook has 2.5 billion global users, 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 be the first large technology company to launch such a project.
According to reports, India has 480 million internet users followed by China. That number is estimated to increase to 737 million by 2022, according to Forrester Research Inc.