Facebook is developing a stablecoin, which would ultimately power money transfers through the site, according to reports emerging this week.
Sources close to the social media giant were reported to have said the firm is in advanced planning stages of the cryptocurrency, which will initially be tested by users in India via payments through messaging app Whatsapp, which was acquired by Facebook in 2014.
With over 200 million Whatsapp users, India is also home to one of the world’s largest remittance markets, with almost $70 billion sent home from migrants to support family in India in 2017.
Stablecoins are cryptocurrencies designed to be as stable as possible, eliminating the potential for price fluctuations. Stablecoins are often pegged to currencies like the US dollar on a 1:1 basis, enabling transactions to be sent via the blockchain without the risk of currency fluctuations.
While there is no suggestion as yet as to how the Facebook stablecoin will be pegged, the technology could enable social media users to send direct peer-to-peer payments, with all the benefits of a regular cryptocurrency payment.
Facebook has been investigating blockchain for some time, creating a specific blockchain division back in May. Since then, the division has been increasing recruitment efforts, as Facebook tries to bring in more developers to continue its exploration of the technology.
Cryptocurrency analyst Anthony Pompliano said any Facebook stablecoin product would introduce billions of users to cryptocurrency for the first time.
“If Facebook launches the stablecoin they are reportedly building, it will quickly become the most used product in crypto…The Indian government has been fighting crypto too so things are about to get very, very interesting.”
The move follows similar steps by social media firms elsewhere, with Kakao, Telegram and LINE all known to be active in developing blockchain and crypto payments tech.
Back in August, LINE launched its blockchain and LINK token, becoming the first publicly traded company to have launched a cryptocurrency, with other firms known to be actively exploring and testing similar technology.
There remains no official indication of a launch date for the Facebook payments platform, or the initial Whatsapp pilot. However, if the same systems that support payments in cryptocurrencies like bitcoin comes to Facebook and Whatsapp any time soon, it’s likely to fuel mass use and adoption of cryptocurrency for peer-to-peer payments.