In a recent article, we talked about how Facebook\u2019s CEO, Mark Zuckerberg, is planning to implement a blockchain-based login service for the social media platform. It now seems like Facebook is getting involved in the crypto market, since reports indicate that the social media giant is working on a digital currency to be used for the upcoming WhatsApp payment platform.<\/p>\n
The news first broke at the end of 2018, following a Bloomberg
\nreport on the matter, quoting Facebook sources. Initial rumours stated that
\nthe cryptocurrency will be a stablecoin, thus its value would be tied to the US
\ndollar. New reports on the matter mention that Facebook has chosen a different
\napproach, hence the coin would be a Basketcoin. This means that its value won\u2019t
\nbe pegged to the US dollar only, but rather to several other currencies,
\nincluding the Japanese Yen and the Euro. Therefore, it most likely won\u2019t be used as an investment
\ninstrument, but rather as a tool for sending money via WhatsApp, Facebook\u2019s
\npopular instant messaging app used by 1.5 billion people. As such, the
\nBasketcoin approach makes sense, since price fluctuation fears will be greatly
\nreduced. <\/p>\n
At this time, it is expected that the FaceCoin will initially
\nserve the remittance market in India. To put things better into perspective,
\nIndia is well-known for its cross-border payment market, granted that
\napproximately $80 billion are sent in the country by Indians working abroad on
\na yearly basis. Facebook\u2019s entry in this multi-billion dollar market makes complete
\nsense for the company, and the Indian population. Based on this, a WhatsApp
\npayment system backed by the FaceCoin would make it easier, cheaper and faster
\nto send money back home. <\/p>\n
Further reports indicate that Facebook is already
\nnegotiating trading terms with several digital currency exchanges, as part of
\ntheir preparation for the coin\u2019s launch. It is important to point out the fact that these are merely rumours,
\nsince neither Facebook, nor WhatsApp representatives have officially confirmed
\nthe news. On the other hand, sources point out that the cryptocurrency\u2019s
\ndevelopment is under great secrecy. Reportedly, staff involved with the
\nFaceCoin, work from a separate section of the building, protected by key card
\naccess. <\/p>\n
Facebook\u2019s consumer-focused involvement in the digital currency market sounds exciting. Yet, there are numerous concerns on whether the coin will take privacy into account. Additionally, it\u2019s not yet known whether it\u2019ll be based on a public blockchain, similar to most other cryptocurrencies. These aspects will likely be clarified once the social media giant decides to go public with the announcement. <\/p>\n
The growing trend of centralized cryptocurrencies developed by big companies and governments will surely have an impact on the digital currency market. Assessing its magnitude is an important challenge worth considering. <\/p>\n