Facebook’s sudden increased interest in the market sparkedquestions, as people throughout the world begun wondering what the platform wasplanning. When announcing the inception of its blockchain department, thecompany mentioned that: “Like manyother companies, Facebook is exploring ways to leverage the power of blockchaintechnology (…) This new small team is exploring many different applications. Wedon’t have anything further to share.”
Well, we finally have the answer. It seems like the companyis working on a cryptocurrency that would be made available on the WhatsAppmessaging application.
As such, WhatsApp is looking to implement some of thepayment transfer functionalities that rivals such as the Chinese WeChat arealready providing their users with. However, the feature will be different,since the WeChat payment transfer feature isn’t based on a digital currency. Withthis in mind, the cryptocurrency will be a ‘stablecoin’. This means thatFacebook will try its best to keep the coin’s volatility as low as possible,thus tying its value to the US dollar.
Internal sources have stated that the coin is far from beingreleased, and that development efforts are just being started. Facebook willalso have to devise a financial strategy alongside a method of protecting itscustodial assets.
WhatsApp’s fintech ambitions are understandable, granted itsmassive number of users and the afferent potential of the new feature. Additionally,reports indicate that the blockchain-based cryptocurrency will be firstreleased in India, where there are over 200 million users of the messagingplatform. Initially, it will serve as a remittance coin – as over $69 millionare sent home by Indians working abroad on a yearly basis. Lastly, India is alsohome to a population that is massively unbanked, thus further increasing thepotential of Facebook’s cryptocurrency.
The concept of stablecoins isn’t new to the digital currency market. However, most companies working on such coins haven’t gathered a huge following, because of regulatory issues and the lack of relevant use cases. With the WhatsApp cryptocurrency, however, Facebook may just create a new high-profile cryptocurrency.
Featured Image via BigStock.
