Back in May, while most Facebook-related reports still talked about the then-recent Cambridge Analytica scandal, Facebook quietly confirmed that a new unit led by former Messenger chief David Marcus would explore blockchain technologies.
At the time, we wondered whether Facebook was developing its own Bitcoin rival — a cryptocurrency that could be used inside its own products. A brand new report now says that Facebook is indeed planning to use crypto for payments inside the immensely popular WhatsApp messaging app.
The move into payments via crypto assets isn’t surprising for Facebook, considering that Marcus was once the president of PayPal. Sources familiar with the matter told Bloomberg that Facebook’s cryptocurrency will let users transfer money on its WhatsApp messaging app with a major focus on India. WhatsApp has more than 200 million users in India, and the country leads the world in remittances. According to the World Bank, people sent $69 billion home to India in 2017.
Facebook will reportedly use a stablecoin, or a digital currency that will be pegged to the US dollar to minimize volatility. In other words, unlike Bitcoin, this type of cryptocurrency can’t increase or decrease in value.
Facebook is apparently “far” from releasing the coin, because it’s still developing the strategy for it, “including a plan for custody assets, or regular currencies that would be held to protect the value of the stablecoin.” Facebook’s coin wouldn’t be the first one to be pegged to the dollar. Tether is a more famous one, but was the subject of several controversies over the past year, as the company behind it was often criticized for a lack of transparency regarding its actual funds. Other stablecoins are also available, but none of them are as well-known as Tether.
The report doesn’t explain how the WhatsApp-based crypto transfer process would work, but Facebook will probably explain it in great detail once the product is ready to launch.