Facebook Rumored To Launch Its Own Cryptocurrency For WhatsApp Money Transfers
Facebook might be joining the blockchain party in a potentially big way, by developing its very own cryptocurrency that would enable users to transfer money over WhatsApp, the cross-platform messaging service the company acquired in early 2014 for $19 billion. On the surface, blockchain and WhatsApp seem like a natural fit.
The appeal of WhatsApp is that it utilizes end-to-end encryption and is viewed as a secured messaging platform. It's also available to the public at large and boasts over 1.5 billion monthly users, who collectively send 60 billion messages every day, according to data Mark Zuckerberg provided for the fourth quarter of 2017. Those figures are undoubtedly even higher today.
Likewise, the touted advantage of blockchain technology is security as well. However, that security comes at the expensive of stability—cryptocurrencies are volatile and subject to wild swings in value.
People who are supposedly familiar with Facebook's plans told Bloomberg that the company would attempt to minimize volatility by developing a stablecoin, a type of digital currency pegged to the US dollar. Facebook is not close to releasing its own cryptocurrency, but is said to be formulating a strategy, part of which is a plan for custody assets that would be held to protect the value of its stablecoin.
"Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology," a spokesperson for Facebook said in a statement. "This new small team is exploring many different applications. We don’t have anything further to share."
It's an interesting play, though it remains to be seen if it would draw any kind of real interest from users at large. After exploding earlier this year, the cryptocurrency market has sort of bottomed out. Yes, Bitcoin is still worth $4,000 a pop, but it was also trading for around $20,000 earlier this year.
Nevertheless, it seems like a foregone conclusion that Facebook will enter into the financial services market, whether through cryptocurrency or some other way.