Facebook is reportedly developing its own cryptocurrency. Insiders from the company revealed that the social media giant is working on a cryptocurrency. This currency will allow users to transfer money on WhatsApp, the popular messaging app owned by Facebook.
Facebook is currently believed to be working on a strategy for this cryptocurrency, which could be a stablecoin, Bloomberg reports. Stablecoin is a form of digital currency, secured to the US dollar. It is used to control fluctuations in value. Insiders, who asked for their identity to be hidden, revealed Facebook’s plan of using custody assets, whereby regular currencies would be held in order to protect the value of its stablecoin.
The insiders also revealed of the company’s plan of starting with the Indian remittances market. The country is currently the world leader in remittances. According to the World Bank, Indians sent home a whopping $69 billion in 2017. Also, WhatsApp is extremely popular in India, with over 200 million users. India has 480 million internet users in total and the number is expected to rise up to 737 million by 2022. Facebook obviously sees a huge growth opportunity in the country.

Facebook’s Response

Facebook itself had banned all cryptocurrency ads on its platform earlier this year, saying they were “frequently associated with misleading or deceptive promotional practices.” But this news shows that the company isn’t necessarily against the use of digital currency altogether. Facebook was asked to comment on these reports. In response, a company spokesman gave the following 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.”

For long Facebook has been anticipated to expand its business into the financial services sector. In 2014, the company hired former PayPal president David Marcus to lead its Messenger app. In May Marcus was appointed as the head of Facebook’s blockchain initiatives. Bloomberg reports that the company has so far hired almost 40 people in its blockchain team.

The Rise of Stablecoins

Stablecoins have grown in popularity in the past year. Stable.Report, a site that tracks stable tokens reported that at one point there were as many as 120 ventures working with stabelcoins. Stablecoins were created to be the less volatile alternatives to Bitcoins. This could be achieved by pegging them with actual currencies. The idea was that a more secure currency would appeal more to consumers. But in reality, the idea hasn’t worked out as well as anticipated.

Facebook is one of the biggest tech companies in the world. It has annual revenue of over $40 billion and a user base of 2.5 billion people worldwide. It will be interesting to watch how Facebook will handle the issue surrounding Stablecoins .


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