Major social media and messaging platforms like Facebook, Instagram, Signal are reportedly in discussions wherein they are planning to roll out all-new cryptocurrencies in the upcoming few years. The new move is aimed at allowing users to send money to their contacts on messaging apps with Venmo or PayPal. With the two apps, it is possible to move money across international borders. There are also reports that Facebook is secretly working on building a coin which WhatsApp users can send to their friends and family over the messaging app instantly, states a report published in The New York Times.
The social media giant has already had discussions with various cryptocurrency exchanges regarding selling the Facebook coin to the consumers. WhatsApp is not the only messaging app to be getting a crypto coin for its consumers. Even other major messaging platforms like Telegram with an estimated 300 million users worldwide are reportedly working on a digital coin. Encrypted messaging app, Signal is also working on its own coin. If the idea is right, Facebook and Telegram could make the digital wallet for cryptocurrencies available to millions of users in an instant.
Similar to Bitcoin, the new line of cryptocurrencies will make it simpler to move the money between the two countries. In the current designs being discussed, they generally do away with the energy-guzzling mining process which Bitcoin normally relies on. However, on the downside, the Facebook, Telegram and other companies are likely to face the same regulatory obstacles, if not technological hurdles which have kept Bitcoin from going mainstream.
Facebook has employed over 50 engineers who are working this project right now and the project is run by the former president of PayPal, David Marcus which started last year after Telegram raised a heart-stopping $1.7 billion in order to fund its cryptocurrency project. Facebook has been secretive about what it has been building. So secretive that the project employees get separate key cards so other employees who are not a part of the project can enter the facility.
Facebook has been looking at various ways to use the blockchain technology which was introduced by Bitcoin and the method makes it possible to keep shared records of multiple financial transactions on several computers instead of relying on one central player like PayPal or Visa.
The report on NYTimes quoted Facebook project employees stating that the companies most immediate product were most likely to be a coin which would be pegged to the value of traditional currencies, also stated in a report by Bloomberg who reported it first.
Facebook is already looking at fixing the value of its crypto coin to a basket of different foreign currencies, including the dollar, Euros, and other national currencies which are held in Facebook’s bank accounts. Facebook is already overhauling its messaging infrastructure which will connect three of its properties – Messenger, WhatsApp, and Instagram. However, it remains to be seen the degree of control that Facebook would retain over its coin. If Facebook became responsible for each and every transaction and also keeping track of the user, it would need a centralized, traditional systems like PayPal.
However, working with cryptocurrency exchanges would take at least some of the regulatory burden off Facebook, since the exchanges would be responsible for holding the digital coins and checking and vetting customers.