Facebook doesn’t hold an enviable record on preserving users’ data secrecy and the multiple allegations that cropped up last year did make a dent to its public image. But that doesn’t mean that the company has stopped looking to develop new features and applications for its social media platform. A report on Bloomberg stated that Facebook is inventing a new cryptocurrency that will be used for the transfer of money on its popular social messaging application, WhatsApp.
Development of Stablecoin
It is known that the company has been working to develop a kind of cryptocurrency for quite some time and recently upped its effort to explore blockchain Technology under the aegis of David Marcus. More specifically, according to Bloomberg, Facebook is developing a stablecoin to minimize the effect of high volatility that is usually associated with the cryptocurrencies. Reports also suggest that the exploration is far from over and launch will not take place anytime soon as the company is still mulling on its strategy. To hedge against volatility and provide consistent value to stablecoin, Facebook will hold regular currencies or custody assets, told the people privy with the development to the publication.
David Marcus: Man behind Project
This blockchain project of the company is led by Marcus who has been elevated from his role of running Facebook Messenger App to lead the blockchain initiative of the company. The company has also inducted new people specifically for the blockchain project with the size of the blockchain team swelling to 40 people recently, reveals the report. Reacting to a query of Bloomberg, Facebook’s spokesperson confirmed that the company is exploring the ways to leverage the unique aspects of blockchain Technology. The company’s representative said that Facebook is looking at many applications including Blockchain, refusing to share any specific information,
Focus on WhatsApp
The new Facebook stablecoin will be primarily used as money exchanging mean on its WhatsApp platform – a company’s social messaging app with more than 1.5-billion users around the globe. The app is particularly famous in India having a user base of more than 250 million and is now working to launch a unified payment interface (UPI)-based money transfer for its users. Facebook is also lured by the business proposition of remittance in India as the data from the World Bank for 2017 revealed that country tops in the list of remittances with total transactions valued at $69 billion.
New Growth Strategy
Of late we have witnessed increased interest in the cryptocurrency and blockchain as many of the mainstream companies across the segments have announced their direct and indirect foray into the world of digital coins. The idea of digital currency sounds very attractive although its replication in real life still faces a lot of hurdles. Besides, there are a lot of controversies related to volatility, compliance, and governance issues related to cryptocurrencies including stablecoins like Tether and Basis.
FB is searching for new ways to stimulate its growth that seems to have reached a level of maturity. The acquisition of Instagram and WhatsApp was part of its strategy to expand its user base, and now, the company has started focusing on how to make money out of these platforms. However, Facebook needs to be extremely careful as it will be under the lens with any new launch since the company was found guilty of breaching the privacy of its users last year in Cambridge Analytica case.