Is Facebook finally developing its own cryptocurrency?
According to unnamed sources, Facebook has been working on its own cryptocurrency, a stablecoin pegged to the US dollar. The currency is believed to be being created in order to facilitate money transfers over its messaging app, WhatsApp. And, as reported by Bloomberg, the currency will initially focus on the Indian remittance market. While it is not yet known what stage of development the currency is at – and official verification of the report has not yet occurred- the report says that it is still a long way off.
The report could be a boost to the stablecoin market, which has been struggling badly for several months. Despite the fact that 2018 was widely predicted as being a breakthrough year for the stablecoin, Tether has been unable to shake off ongoing controversy over their currency, and only a week ago, Basis shut down, despite having raised over $130 million in funding.
The only problem is that the controversy surrounding Tether all boils down to one thing: trust. Facebook has had a torrid time this year, with the Cambridge Analytica scandal raging on, dragging the company’s name through the mud. But the latest scandal to embroil the firm may be a tipping point for the social media giant. The New York Times published a report, beginning, “For years, Facebook gave some of the world’s largest technology companies more intrusive access to users’ personal data than it has disclosed, effectively exempting those business partners from its usual privacy rules, according to internal records and interviews. The special arrangements are detailed in hundreds of pages of Facebook documents obtained by The New York Times. The records, generated in 2017 by the company’s internal system for tracking partnerships, provide the most complete picture yet of the social network’s data-sharing practices.”
Whether or not Facebook can shake the constant revelations and ensuing lack of trust in its brand is critical to its future successes, including this cryptocurrency project. However, India is the most secure market for the company to start in, with some 200 million WhatsApp users, and one of the world’s largest remittance markets to boot. There is certainly a market there, but whether or not the amounts of people they will be hoping for will be willing to trust WhatsApp with money transfers or not, remains to be seen.
The Facebook blockchain project was set up in May 2018 and is being spearheaded by ex-PayPal president, David Marcus. Back then, the announcement of the side project had coincided with a ban on crypto and ICO-related advertising on the platform. It will be interesting to see how such a ban could remain in place if Facebook were to launch their own cryptocurrency, even if it effectively lived on WhatsApp, not Facebook itself. But all this feels a long way off at this stage: Facebook have far more pressing issues to deal with in the wake of the New York Times article this Christmas.