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In May, while most of the Facebook-related reports still talked about the recent Cambridge Analytica scandal, Facebook quietly confirmed that a new unit led by former Messenger chief David Marcus would explore blockchain technologies.
At the time, we wondered if Facebook was developing its own rival Bitcoin: a cryptocurrency that could be used inside its products. A new report now says that Facebook actually plans to use encryption for payments within the extremely popular WhatsApp messaging app.
Switching to payments via cryptographic resources is not surprising for Facebook, considering that Marcus was once the president of PayPal. Family sources with the question told BloOmberg that Facebook's cryptocurrency will allow users to transfer money to their WhatsApp messaging app with a particular focus on India. WhatsApp has over 200 million users in India, and the country is a leader in the remittance world. According to the World Bank, in 2017 people sent 69 billion dollars to India.
Reportedly, Facebook will use a stablecoin or digital currency that will be anchored to the US dollar to minimize volatility. In other words, unlike Bitcoin, this type of cryptocurrency can not increase or decrease in value.
Apparently, Facebook is "far" from issuing the currency, because it is still developing the strategy for this ", including a custody account plan, or regular currencies that would be withheld to protect the value of the stablecoin." The Facebook currency would not be the first to be pegged to the dollar. Tether is more famous, but has been the subject of much controversy in the last year, as the company behind it has often been criticized for the lack of transparency regarding its actual funds. Other stablecoins are also available, but none of them is known as Tether.
The report does not explain how the cryptographic transfer process based on WhatsApp would work, but probably Facebook will explain it in detail once the product is ready for launch.
Image source: MAXIM SHIPENKOV / EPA-EFE / REX / Shutterstock
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