Facebook is getting into the crypto business.
That’s according to new reporting by Bloomberg. Sources familiar with the project told the business magazine that the social media giant is working to develop a money transfer system for its WhatsApp chat app that uses a stablecoin — a form of blockchain-based cryptocurrency that is pegged to a particular unit of value like the U.S. dollar. For a major tech corporation like Facebook to enter into the cryptocurrency space could be a key inflection point for the blockchain industry.
WhatsApp may not be the number one choice of messenger app in the U.S., but it enjoys massive popularity in other parts of the world, including India — over 200 million of the app’s 1.5 billion users reportedly live there. Many global immigrants send money back home in the form of remittances, including almost $70 billion worth sent to India alone in 2017, according to the World Bank.
Now it looks like Facebook wants to take a cut using cryptocurrency. Rumors about the possibility Facebook is getting into crypto arose when the company made some key hires for a brand-new blockchain team back in May 2018. And the company sent out job listings for five more staff positions earlier this month.
But Facebook picked a challenging moment for the venture. Stablecoin startup Basis had to close its doors earlier this month after only eight months in the cryptocurrency business thanks to regulatory hurdles.
And then there’s the complicated relationship between Facebook and India. The Indian government recently warned Facebook that its WhatsApp platform was to blame for an intense wave of mob violence.
The bottom line: do the people of India — and their government — really have enough faith in the Facebook-owned platform, and in the stability of cryptocurrency, to send money using the new system? That remains to be seen.
READ MORE: Facebook Is Developing a Cryptocurrency for WhatsApp Transfers, Sources Say [Bloomberg]