- Facebook to Launch Cryptocurrency Stablecoin
Facebook Inc. is planning to introduce cryptocurrency for its over 1 billion WhatsApp users, according to people familiar with the matter.
The social media giant is working on a digital currency, stablecoin, that will be pegged to the U.S. dollar in order to minimize volatility.
Stablecoins are asset backed cryptocurrencies but centralised since it is regulated by body managing the underlying assets. Stablecoins are correlated to assets outside cryptocurrency, therefore, limiting risk exposure.
The source who asked not to be identified said Facebook will be focusing first on India market, however, said the company is far from releasing the digital coin as they are still working on implementation strategy.
Mark Zuckerberg announced in January that Facebook is studying blockchain technology to see how it could be integrated into its business. The company later made David Marcus, former PayPal president the head of its blockchain initiatives. Since then it has employed about 40 blockchain technologists.
“Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology,” a company spokesman said in a statement. “This new small team is exploring many different applications. We don’t have anything further to share.”
The social media giant is focusing on India because of two main reasons; WhatsApp has more than 200 million users in the Asian country, and Indians remits the most money back home in 2017, a total of $69 billion, according to a data released by the World Bank. Facebook is leveraging its huge global presence for revenue growth, most especially after series of lawsuits and several security issues that are projected to hurt its revenue going forward.
“Facebook adoption of the blockchain technology will boost its mainstream penetration and enhance its global acceptance,” said analysts at Investors King Ltd.
The news boosted Bitcoin value to $4170 a coin after declining to $3104 on December 14th. Still, the uncertainty surrounding the cryptocurrency industry remained especially as most potential investors continue to doubt its viability.