Facebook is developing a cryptocurrency that will allow users to transfer money on its instant messaging app WhatsApp, according to a report by Bloomberg. The US-based social media giant is planning to target India’s remittance market through WhatsApp, which has over 200 million users in the country. Last year, India received $ 69 billion as remittances from its diaspora.
The report suggests that Facebook is working on digital currency — stablecoin — to minimize market volatility. It is also working on a plan for custody assets or regular currencies that would be held to protect the value of the digital coin, the report said citing sources.
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Stablecoin is a digital currency designed to minimize the effects of price volatility. It is different from Bitcoin, which is highly volatile and sometimes sees 10-15 per cent fluctuations in a single day. Stablecoin, which is pegged to the US dollar, seeks to function as a store of value and could save users from high volatility.
The social media giant was expected to enter the financial services after it hired PayPal president David Marcus to steer WhatsApp. Marcus was later appointed to head the company’s blockchain initiatives.
Informing about the recent development, a company spokesman in a statement told Bloomberg: “Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications. We don’t have anything further to share.”
Several top economists and businesspersons have raised doubts over the rise of the cryptocurrency market. However, they believe that clock-chain technology could be used to solve issues such as supply chain and cloud storage.
In India, the Reserve bank of India has banned all the financial entities from providing services to any person or entity in dealing with virtual currencies. Such services include maintaining accounts, trading, settling, clearing, giving loans against virtual currencies, and accepting such currencies as collateral.
