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The cryptocurrency sector has been the subject of news from sources close to Facebook claiming that the company is developing a cryptocurrency that will allow users to transfer money via the company's WhatsApp messaging app. If the reports are accurate, the The move would strengthen the cryptocurrency market by adding the two billion WhatsApp members as potential users.
On 20 December, Bloomberg reported that Facebook is developing a stablecoin, a form of digital currency that reduces volatility by being pegged to the value of the US dollar. The company's foray into financial services is not a surprise, following the hiring of former PayPal president David Marcus in 2014. Marcus became head of the company's blockchain initiatives in May. The company added 40 hires to these efforts so far, according to employee headlines on LinkedIn.
The prices of bitcoins and other cryptocurrencies have shrugged the news. After a short, higher prominence on the day of the announcement, prices have largely trampled on water in the last week.
The long-term history of using digital currency is different, however. The fintech sector is exploding in emerging regions where digital platforms can help overcome the limited credit score systems and low rates of bank utilization, so this move could allow Facebook to enter the fintech digital arena.
Officially, Facebook has not yet come to normal, stating in a written statement that "like many other companies, Facebook is exploring ways to harness the power of blockchain technology." He added that "this new small team is exploring many different applications, we have nothing else to share".
Despite the collapse of the assessments of Bitcoin and other popular cryptocurrencies, 2018 saw a boom in projects related to the stablecoin, with about 120 initiatives launched in 2017 and 2018. The total number of stablecoin remains a matter as some have ceased to function while others are purely for internal use in financial institutions and internal applications. The sources cited in the Facebook news recognize that the initiative is still in the strategy phase with many remaining questions.
However, as a company with 2.5 billion global users, over $ 40 billion in annual revenue and ever-increasing experience with regulatory problems with navigation, Facebook could have more chances than previous competitors to create a stablecoin that will remain faithful. If the planned launch were to happen, Facebook would be the first major technology company to launch such a project.
Regarding the probabilities of a widespread adoption by Facebook, Alexey Markov, head of a private commercial organization of cryptocurrency called United Traders, noted that "the biggest problem with cryptocurrencies and blockchain projects, which they are both fairly recent creations, is that there are no user friendly interface or mass adoption. "
Some competing messaging apps already offer an "internal cryptocurrency" as a reward or incentive for use. Others, like Telegram, offered a cryptocurrency as part of their initial coin offering.
Markov noted that "while many messaging services (Line, Telegram and WeChat) already have internal currencies, WhatsApp is a very widespread and truly international service with a large audience." To get such a large audience involved in encrypted transactions would mean a lot future of the market if it actually happens ".
What does this mean for cryptocurrency evaluations? Richard Swart, a strategic consultant for the Gravity Accelerator based in the United States, a global blockchain-business accelerator, said he expected Facebook's news, if it were true, to have different effects.
"The two main impacts are that the cryptocurrency will become more widespread (because more people will come into contact with technology) and more financial technology games will appear (because entrepreneurial efforts will follow Facebook's remittance development plan)," Swart said.
Overall, Swart is optimistic about the impact not only on cryptography but also on the blockchain ecosystem that surrounds it: "This is less than Facebook opens its social network to cryptocurrency, while Facebook opens a new front of financial technology , "He said.
However, not all possibilities are positive, noted Swart. "Unless there is a significant restructuring of Facebook's business model [that provides clients access to its users’ data], there is a possibility that Facebook security concerns are similar to those of [election influence] campaign in 2018 could also transfer in this cryptocurrency effort in 2019 ".
Simply put, the jury is still out, although Facebook's interest in the industry is a positive development after the initial ban of the cryptocurrency ad company since January that canceled just a few months ago at the end of June.
Year-end tax savings for cryptocurrency losses
In other news at the end of the year, ProfitStance, a tax accounting and cryptocurrency platform, notes that now is the ideal time to block the tax savings resulting from cryptocurrency losses. If you sell, or sold, cryptocurrency in loss in 2018, you can use those losses to offset capital gains or up to $ 3,000 in ordinary income. And like any other investment loss, you can even bring losses in excess of $ 3,000 for the next year.
For financial advisers who advise customers who hold cryptocurrency and have suffered losses, this news could provide a small advantage as we approach the final week of the year.
