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Facebook is reportedly working on its own cryptocurrency

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Facebook is building a cryptocurrency to be used on WhatsApp, new report claims.
Facebook is building a cryptocurrency to be used on WhatsApp, new report claims.

Image: Thomas Trutschel/Photothek via Getty Images

Facebook is working on a cryptocurrency that will let users of WhatsApp — the messaging service that the social network giant acquired in 2014 — send and receive money, Bloomberg reported Friday, citing people familiar with the matter. 

The initial focus of this effort would be the remittances market in India, the report says, and the cryptocurrency would be a stablecoin — a special type of cryptocoin which has its value pegged to some real world asset, such as the U.S. dollar.

According to the report, this stablecoin might not launch for quite some time, as Facebook hasn’t yet decided on key aspects, including the currency or currencies the stablecoin would be pegged to. 

Stablecoins have been a popular crypto-niche in 2018, as they solve one key issue that prevents Bitcoin and other major cryptocurrencies being usable for payments and microtransactions: volatility. Some major coins that launched this year include TrustToken’s TrueUSD and Coinbase’s USDC — though it also needs to be said that a well-funded stablecoin project, Basis, recently folded after bumping into regulatory problems.

If Facebook plans to use a cryptocurrency for the booming remittances market in India, which according to the World Bank was worth $69 billion in April, a stablecoin makes sense as it would protect users from volatility.

The idea of using a cryptocurrency for transactions within a messaging service isn’t new; In 2017, messaging service Kik announced its own cryptocurrency called Kin. Earlier this month, the company put Kin to use with a tipping feature, but the feature is only available for select users.

This is not the first sign that Facebook is working on something blockchain-related. The company assigned its head of Messenger, David Marcus, to a new, blockchain-focused role in May. “I’m setting up a small group to explore how to best leverage Blockchain across Facebook, starting from scratch,” Marcus said at the time. Earlier this month, The Block reported that Facebook is ramping up its hiring efforts for this team. 

In a statement to Bloomberg, Facebook said it’s “exploring ways to leverage the power of blockchain technology” but declined to comment further.  

Disclosure: The author of this text owns, or has recently owned, a number of cryptocurrencies, including BTC and ETH. 

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