Bloomberg recently reported that Facebook is working on developing a cryptocurrency meant for Whatsapp users. Sources shared that Facebook is developing a stablecoin, a cryptocurrency designed to minimize effects of price volatility by pegging to a currency, which in this case would be the U.S. dollar.
The cryptocurrency was said to be targeted at the Indian remittances market, which is a very significant market. The World Bank reported that India received foreign remittances of approximately $69 billion in 2017, which contributed to 2.8% of the country’s GDP (Gross Domestic Product).
Once Whatsapp introduces the stablecoin, it will certainly be widely used as there are over 200 million residents using the messaging app in India. As the country continue to develop and its internet and data costs drop, the number of Whatsapp users in India will only see increase in the future.
At the beginning of the year 2018, Facebook initially banned ads related to crypto to prevent the spreading of misinformation and fraudulent activities, a sign that the social media giant did not believe in cryptocurrencies. However, later in the year, Facebook lifted the ban on crypto except for initial coin offerings (ICOs), which were still shrouded by suspicious schemes.
Additionally, Facebook appointed David Marcus to be the company’s head of blockchain initiatives in May, proving the change in Facebook’s initial stance. David Marcus was the former president of Paypal back in 2014 as well as a board member of major crypto exchange CoinBase, a position he had dropped to prevent clashes of interest. Facebook proceeded to hire talented people in the field, forming a blockchain group with about 40 people that was meant to help the company move into the financial market.
It was confirmed that the cryptocurrency would not be hitting the market any time soon as the company is still in the process of strategizing how and which assets will the stablecoin be tied to.
Multiple stablecoin-related projects were carried out through the year 2018, but not a lot of them turned out successful due to how cryptocurrencies are currently categorized under securities. Hopefully, a major company with a deep background such as Facebook will be able make the concept work in the future as the U.S. government introduces more regulations to help the growth of crypto.
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