Facebook is reportedly developing a cryptocurrency that will be backed by the US dollar making it more stable and reliable than other coins. Bloomberg reported the news that the tech giant was creating the coin for use within the WhatsApp messaging app.
It looks like Facebook would first launch the service in India, a country with over 200 million WhatsApp users. According to sources close to the company, the ‘stablecoin’ isn’t close to being released but is currently working on strategies that will ensure the coin's stability.
Facebook hires PayPal exec to expand into finance
The move towards a cryptocurrency will come as no surprise to those watching Facebook closely. The social media company hired former PayPal president David Marcus to run its Messenger app in 2014, May is now reportedly leading the stable coins development.
It seems like the company has also rapidly expanded its blockchain department making recent 40 new hires. "Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology," a company spokesman said in a statement.
WhatsApp heavily used in India to send money
"This new small team is exploring many different applications. We don’t have anything further to share." Users of WhatsApp can transfer payments to contacts after linking their bank account to the service.
According to the World Bank, India sent $69 billion through the app. Stablecoins differentiate themselves from regular cryptocurrency coins by being linked to currencies that will reportedly make them more stable than their typically volatile cousins.
Stablecoins yet to make their mark
According to Stable Report, a website that tracks stable tokens, at one point his year there were more than 120 stable coin ventures. Many of these have collapsed. There hasn’t been a big success story yet, the most high-profile stablecoin to date, Tether, is caught in controversy due to its refusal to be audited.
Their refusal casts doubt over the company's claims that each of its tokens is backed by one U.S. dollar has also been surrounded by controversy. While Tether’s creators say each of its tokens is backed by one U.S. dollar, the company’s refusal to be audited has raised questions about whether that’s the case.
Facebook needs to rebuild customer trust after shocker year
The idea was originally devised to make blockchain currencies easier to use in daily life. Facebook has had a horrendous year. Trust among its users is likely to be low after there were claims about personal data sharing and secret deals which the company denied.
It is unclear when Facebook would launch its stablecoin venture.