As reported by Bloomberg today, social media giant Facebook Inc is working on a stablecoin cryptocurrency for money transfers on its WhatsApp messaging app while eyeing the Indian remittance market.
Bloomberg cited anonymous sources close to this development within Facebook, that the stablecoin project being explored will have similarities to stablecoins pegged to the US dollar.
The stablecoin property, as with others, will help “to minimize volatility” once associated with other assets classed as custody assets which could also include regular currencies currently being deliberated. These custody assets will “protect the value of the stablecoin”, the report reads. Although development plans are in motion, a release date for the product is still uncertain and at best far from being ready.
Facebook’s interest into the financial service markets may have been orchestrated long before now, possibly highlighted when David Marcus, a former PayPal president, joined Facebook’s messaging app Messenger in 2014 as its vice president. More so, Marcus’s experience as once serving board member with Coinbase becomes invaluable in the new direction Facebook is headed when it launched its blockchain initiative early this year.
India seems to be a perfect site to deploy its product as the WhatsApp messenger is popular in the country, even reaching the rural areas. More so, as a huge economic significance, the interest seems quite valid when it comes to the remittance market. In 2017, India reportedly made up 2.8% of its GDP from foreign remittance equivalent to USD 69 billion according to World Bank data.
Facebook may seem to have encountered eye-opening events after a period of disapproval of the associated elements – cryptocurrency and ICO – as depicted by the ban of ads related to such on its platform earlier this year.
More so, with more mainstream industries delving into blockchain technology and exploring new ways to harness its potential or build on existing architectures, it’s no surprise Facebook queued in. According to the source, a company spokesman said, “Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology.”
In 2018, the rise of stablecoins has become a subject undergoing intense study relative to the volatility of digital currencies, with Bloomberg reporting more than 120 ventures in that direction. Facebook’s recent interest into blockchain and now stablecoins will play a significant role in blockchain adoption seeing how its acquired messenger app – WhatsApp – serves a global market of over 1.5 billion people.
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