Facebook Inc is reportedly developing a cryptocurrency that will enable users transfer money via its WhatsApp messaging app; a move which adds further proof to the company’s goal about better monetizing WhatsApp and adaptive technology.
It could be recalled that the social media giant bought WhatsApp in 2014 for about $19 billion.
The company is developing a blueprint token to be used for money transfers made within the app, with a view to minimize volatility through the stablecoin. According to internal sources, the plans and strategies towards its development are in the works as they look to offer a reliable stablecoin pegged to the USD.
This news comes as no surprise, Facebook has over time been making moves in the financial and blockchain sphere. First was its setup of a blockchain team with about 40 employees headed by former PayPal president David Marcus as well as recent published vacancies by the company for various blockchain roles.
However, despite the budding enthusiasm on this news, Facebook remains quiet on its advanced plans as the company continues to work on a strategy asset to which the stablecoin will be tied. A statement credited to a company’s spokesman says on Bloomberg:
Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring different applications. We do not have to share anything further. He explained.
WhatsApp and India a Logical Choice
According to sources, this new cryptocurrency could have India as its flagship destination as the Whatsapp messaging app is most popular in the country and globally given its cost effective and convenient messaging/money transfer solution.
India plays host to over 200 million monthly active WhatsApp users and 480 million internet users, second only to China. Another reason for India’s choice is the country’s ranking as the world’s largest remittance market with over $69 billion sent home to India in 2017, hence a worthy choice to kick start the project.
The choice of stable coins looks like a new trend as it would offer more stable prices (no volatility) as opposed to the regular cryptocurrencies; even though most stablecoins have faced multiple scrutiny and criticism in recent times.
Mixed Reactions
Analysts in some quarters have embraced the project especially considering a reversal of the company’s initial ban of crypto ads as they believe that Facebook stands a greater chance at recording success with the stablecoin; due to the company’s experience and regulatory trademark.
Another factor they opine is the pedigree of the Facebook team with notable names like David Marcus (Also former board member at Coinbase currently heading the team. It could be recalled that Marcus had resigned his position at Coinbase to focus actively on building the Facebook blockchain team from scratch.
However, a few others believe the proliferation of centralized cryptocureency options are unnecessary as they disrupt the core values of digital and P2P payments.
The Facebook blockchain team has a vision which reads “to make blockchain technology work at Facebook scale and improve the lives of billions of people around the world.” If successful, the project would be the first huge tech project launched by a reputable company.
In all, Facebook’s resolve to monetize WhatsApp with its large number of users seems rational considering its little revenue at this time despite the huge services being rendered. The company had hinted at incorporating status ads and in app purchases on the WhatsApp platform by 2019.
What does the Facebook/WhatsApp project portend for the industry? Are you convinced the crypto sector is here to stay? … Share your thoughts below.
