Facebook has been engrossed in crisis over the past few months that most people have failed to see the massive strides the company is making. The social media giant launched its blockchain exploration arm back in May this year and they have been working to develop products in that industry.
A report by Bloomberg yesterday revealed that the social media giant is currently developing a stablecoin that will make it possible for users to exchange funds via their encrypted chat service WhatsApp. According to the report, the stablecoin will be used for remittance made within WhatsApp and it will initially focus on the market in India.
The stablecoin will be pegged to the U.S. dollars and just like other stablecoins, it wouldn’t be subjected to high volatility like the other cryptocurrencies. Citing unnamed sources, Bloomberg stated that Facebook is currently working on the strategy and thus the stablecoin will not be launched anytime soon. The social media company is also looking to create custody assets i.e. the asset to which the stablecoin will be tied, the sources added.
It is no surprise that Facebook decided to start the service in India as the country is one of the highest remittance countries in the world. A recent report published by the World Bank showed that India received nearly USD 69 billion dollars in foreign remittances in 2017, or 2.8 percent of the country’s GDP. The country also has the highest number of WhatsApp users in the world, with more than 200 million people in India making use of the messaging service.
A spokesperson for Facebook told Bloomberg that the social media firm is looking for ways to take advantage of the power of blockchain technology and this was the reason why PayPal’s former president David Marcus was appointed to head the new blockchain department.
After leaving the Messenger division of Facebook, Marcus stated that “After nearly four unbelievably rewarding years leading Messenger, I have decided it was time for me to take on a new challenge. I’m setting up a small group to explore how to best leverage Blockchain across Facebook, starting from scratch.”
This latest development when it comes to fruition would become very interesting. Anthony Pompliano, a cryptoanalyst and founder and partner at Morgan Creek Digital Assets tweeted the following:
If Facebook launches the stablecoin they are reportedly building, it will quickly become the most used product in crypto.
WhatsApp has over 200,000,000 users in India alone.
The Indian government has been fighting crypto too so things are about to get very, very interesting…
— Pomp 🌪 (@APompliano) December 21, 2018
It will also signal a complete reversal for Facebook after it placed a ban on all crypto-related ads on its platforms earlier this year. It has since then lifted the ban, even though it is still in place for promotional ICOs.