According to Bloomberg, Facebook’s is working on creating a new cryptocurrency with an initial focus on remittances in India.
The new cryptocurrency will allow users to transfer money on WhatsApp, the popular messaging application owned by Facebook.
Facebook’s New Stablecoin
Facebook Inc.’s cryptocurrency in development is said to be a stablecoin pegged to the US dollar.
Stablecoins are pegged to a stable asset to minimize price volatility.
According to the Bloomberg report, people close to the matter state that Facebook is not launching the coin anytime soon as it is still working on its cryptocurrency strategy.
However, the sources suggest that the plan could include some mechanism for custody assets and/or regular currencies that could be used to protect the value of the stablecoin.
Facebook has over 2.5 billion users around the globe and earns $40 billion in annual revenues.
Given its size, global usage and experience in handling regulation, the company has a good chance of launching a stablecoin that sees massive adoption.
It would also become the first of the tech giants to launch such a project.
Facebook’s relationship in India has recently been marred in controversy, as WhatsApp was used to spread fake news in the country, some of which led to violence there.
Facebook believes that India is a market with tremendous opportunity, especially considering that there are 480 million internet users in India today.
The figure is expected to double to 737 million by 2022 according to Forrester Research Inc.
Facebook’s Imminent Move Into Financial Services
Rumors have been suggesting that Facebook is working on a blockchain-based financial services project for a while now.
In 2014, it hired the former president of PayPal David Marcus to run the Facebook Messenger, but in May this year, Marcus became the head of the blockchain initiatives team at the company.
The social media giant has kept the details of the project under wraps but has been hiring people for its blockchain group.
It now has about 40 team members in the blockchain group, going by employee titles on LinkedIn.
A company spokesperson noted:
“Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications. We don’t have anything further to share.”