Facebook Is Developing a Cryptocurrency for WhatsApp Transfers, Sources Say

[Hydrogen]

Facebook Inc. is working on making a cryptocurrency that will let users transfer money on its WhatsApp messaging app, focusing first on the remittances market in India, according to people familiar with the matter.

The company is developing a stablecoin -- a type of digital currency pegged to the U.S. dollar -- to minimize volatility, said the people, who asked not to be identified discussing internal plans. Facebook is far from releasing the coin, because it’s still working on the strategy, including a plan for custody assets, or regular currencies that would be held to protect the value of the stablecoin, the people said.

Facebook has long been expected to make a move in financial services, after hiring former PayPal president David Marcus to run its Messenger app in 2014. In May, Marcus became the head of the company’s blockchain initiatives, which haven’t been discussed publicly in detail. Facebook has been on a hiring spree, and now has about 40 people in its blockchain group, according to employee titles on LinkedIn.

"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."

WhatsApp, the company’s encrypted mobile-messaging app, is popular in India, with more than 200 million users. The country also leads the world in remittances -- people sent $69 billion home to India in 2017, the World Bank said this year.

The past year has seen a boom in crypto projects related to stablecoins. At one point, there were more than 120 ventures related to this theme, according to Stable.Report, a website that tracks stable tokens. The concept was created to create a digital coin that would be far easier to use on daily purchases because it would be more stable than currencies like Bitcoin.

The idea has proven tough to carry out in real life, with at least one high-profile project shuttered in recent weeks. A stablecoin known as Basis recently closed after eight months. The Hoboken, New Jersey-based company said there was no apparent way around being classified as a security as opposed to a currency, which could significantly reduce the number of potential buyers. The swift collapse came after Basis drew well-known backers like Andreessen Horowitz and Kevin Warsh, a former governor of the U.S. Federal Reserve.

Perhaps the most high-profile stablecoin to date, Tether, has also been surrounded by controversy. While Tether’s creators say each of its tokens is backed by one U.S. dollar, the company’s refusal to be audited has raised questions about whether that’s the case.

Facebook, which has 2.5 billion global users, more than $40 billion in annual revenue and greater experience navigating regulatory issues, may have a better chance of making a stablecoin that sticks. It would be the first large technology company to launch such a project. The company’s relationship with India has been fraught, mainly because some instances of fake news spread through WhatsApp have led to violence there. Still, Facebook sees tremendous growth opportunity in the country. India has 480 million internet users, second only to China. That number is projected to grow to 737 million by 2022, according to Forrester Research Inc.

....

More news from anonymous sources, which may or may not pan out.  

Facebook may be using this announcement as a publicity stunt in an effort to artificially inflate the value of its stock which has dwindled in recent times. Mark Zuckenberg came under fire earlier this year for facebook sharing end user data against ethical guidelines. Facebook's declining value could be a result of trust issues. Its an open question as to whether people retain trust in facebook sufficient for them to rollout a stablecoin or blockchain based solution for payment processors.

That said could this be an indication of how far blockchain and crypto currencies have progressed being that large tech giants now view them as being a viable prospect and platform for future growth.

edit link:

https://www.bloomberg.com/news/articles/2018-12-21/facebook-is-said-to-develop-stablecoin-for-whatsapp-transfers

[hatshepsut93]

More news from anonymous sources, which may or may not pan out.  

Facebook may be using this announcement as a publicity stunt in an effort to artificially inflate the value of its stock which has dwindled in recent times. Mark Zuckenberg came under fire earlier this year for facebook sharing end user data against ethical guidelines. Facebook's declining value could be a result of trust issues. Its an open question as to whether people retain trust in facebook sufficient for them to rollout a stablecoin or blockchain based solution for payment processors.

That said could this be an indication of how far blockchain and crypto currencies have progressed being that large tech giants now view them as being a viable prospect and platform for future growth.

Crypto has fallen from grace in the eyes of the public, I doubt that the words "blockchain technology" and "cryptocurrency" can make investors blindly throw money like they did in last year. Maybe it will become like that again during the next bull run though.

Facebook might be also declining because the whole stock market is crashing and not because of the privacy scandals. Not enough people left Facebook to hurt their profitability.

[o_e_l_e_o]

I for one will continue to refuse to use anything that Facebook gets their grimy, privacy-invading hands on. Sure, this might be another example of blockchain technology going more mainstream, but you can absolutely guarantee that if you use this, your addresses and transactions will be added to Facebook's ever growing profile of information on you, and then sold to highest bidder with absolutely no regard for your privacy, anonymity or security.

[davis196]

I think that the facebook stocks are going down,because funds related to Soros are selling their FB stocks and causing market panic.This is just rumors,but I think it's this has some influence over the facebook stocks.
This idea about a fbcoin or a whatsappcoin is complete garbage and probably fake news.No need to comment such fake news.

[jimbo2000]

I for one will continue to refuse to use anything that Facebook gets their grimy, privacy-invading hands on. Sure, this might be another example of blockchain technology going more mainstream, but you can absolutely guarantee that if you use this, your addresses and transactions will be added to Facebook's ever growing profile of information on you, and then sold to highest bidder with absolutely no regard for your privacy, anonymity or security.

Agreed, but the majority won't. Even in the wake of all of Facebook's scandals they still see near record levels of traffic. I for one deleted facebook following all such events as I don't like the idea of someone manipulating my decisions in some way. I do still use whatsapp but it's almost a necessity and I feel that there's more safety in that.

[o_e_l_e_o]

I do still use whatsapp but it's almost a necessity and I feel that there's more safety in that.

There are many other open source and end-to-end encrypted instant messengers you can use, but I appreciate the problem is getting all your friends/colleagues/whoever to use them too.

Signal is the one I use. It is free, open source, and available for in android, iOS and desktop versions. It also supports voice, image, video and file sharing. There is also Wire which pretty much does the same things.

[BitHodler]

This idea about a fbcoin or a whatsappcoin is complete garbage and probably fake news.No need to comment such fake news.

It's not fake news. It's also not complete garbage because they can utilize it in so many ways, that it might even attract a whole new group of users they otherwise wouldn't be able to attract.

There is more to it than just the very obvious. Everything social media giants do is focused at increasing their user base, and I actually believe that they might succeed in doing so, especially if the marketing is done well.

I have seen that even a few local banks here are looking to launch tokens people can exchange for discounts on online purchases. Within 5 to 10 years probably every reputable site or service will have its own tokens.

[tomahawk9]

This idea about a fbcoin or a whatsappcoin is complete garbage and probably fake news.No need to comment such fake news.

It's not fake news, there are several reliable news outlets that are reporting the same news, like Bloomberg, for instance: https://www.bloomberg.com/news/articles/2018-12-21/facebook-is-said-to-develop-stablecoin-for-whatsapp-transfers

Since there's no doubt that this cryptocurrency will become the most used cryptocurrency in the world, I wonder if there's a chance that some people will get curious about other cryptos, I mean, I think in the long run people will want to find alternatives to this centralized cryptocurrency owned by a company that is known for invading its user's privacy, so perhaps this could help other cryptos like BTC reach a mainstream status (?).

[exstasie]

I do still use whatsapp but it's almost a necessity and I feel that there's more safety in that.

There are many other open source and end-to-end encrypted instant messengers you can use, but I appreciate the problem is getting all your friends/colleagues/whoever to use them too.

Signal is the one I use. It is free, open source, and available for in android, iOS and desktop versions. It also supports voice, image, video and file sharing. There is also Wire which pretty much does the same things.

I use Signal but unfortunately the only people I know who use it are people in the cannabis industry (or otherwise involved in black or grey market activity). It's incredible how egregious the privacy violations are with major social networking apps, but nobody seems to care. Most people I talk to have no interest in using Signal. Messenger still seems really popular.

[o_e_l_e_o]

It's incredible how egregious the privacy violations are with major social networking apps, but nobody seems to care. Most people I talk to have no interest in using Signal. Messenger still seems really popular.

I mean, not only to people not care their data is being leaked, hacked and sold, but they are quite happy to give increasing amount of personal data away for free. It's not just Facebook/Google/Apple knowing your name, email, phone number, address, job, location (in real time), friends, schedule, etc. Although this is bad enough, and more than enough data to steal someone's identity or figure the optimum time to rob their house, people are now actively bringing surveillance devices in to their houses, and paying for the privilege, in the form of Amazon Alexa or Google Home or similar devices.

These devices record everything that is said (and in some cases record video 24/7 as well) and send it to some unknown database for storage. We have no idea what that data is being used for, but I would bet every satoshi I own that it is being analysed and sold to third parties. Talking a lot about feeling ill or unwell? I'm sure your health insurance company would be interested to know that. Talking about money worries? I'm sure anyone you are contacting about a loan would pay for that kind of information.

It absolutely boggles my mind that people are so willing to give away every intimate detail of their lives. The same could be said for half the users on this forum who send their KYC documents to some anonymous bounty campaign in exchanges for a few cents worth of the newest trash token.

[The Sceptical Chymist]

Hydrogen, am I missing the source of that quote or what?  Where did it come from?

Anyway, I just learned more about stablecoins than I knew before, so this was an interesting article.  Since I'm not that familiar with them (but I understand the concept), I'm wondering why sending a Facebook coin would be more convenient than just using something like PayPal or a similar service.  I think even Indians working overseas can send funds back to India via PP friends & family for no charge.  The article doesn't exactly say that there's a problem that crypto in general is needed to solve, much less that an unproven, untested, not-yet-developed stablecoin is going to solve.  Are Indians finding it difficult to send money back home? 

I also understand the need for a currency to be stable in order for it to be viable, but I'm not seeing the general public crying out for an alternative to fiat--except in places like Venezuela, but the best solution there would be to use the Peso or USD as currency until the hyperinflation situation resolves.  There are still transaction fees with crypto, plus you have to go out of your way to acquire it...with cash, which, if you have it, means there isn't a problem in the first place.

I for one will continue to refuse to use anything that Facebook gets their grimy, privacy-invading hands on. <snip>

Same here.  I don't use FB, WhatsApp, Twitter, Instagram, or any other social media service, specifically because of the privacy concerns.  And I agree that FB will find a way to exploit the users of its stablecoin if it ever gets off the ground.

[o_e_l_e_o]

And I agree that FB will find a way to exploit the users of its stablecoin if it ever gets off the ground.

You bet. Same with any other of these big companies looking at getting involved in crypto - Microsoft, Amazon, Facebook, Apple, etc. You can absolutely bet that all your transactions and purchases will be used to build a profile of your spending habits and purchases which will be used to target you with ads and other products, as well as sold off to 3rd parties and potentially even governments to use for tax reasons.

I also have concerns with these big companies even when their intentions seem good. For example, the new HTC phone which will have a built in wallet and potentially also be able to run a node. I would be very surprised if their code for this is open source, and you can almost guarantee they will be tracking your transactions.

[Semosuchi Tesongrato]

It is very likely, and it will be the end of the crypto as we know it: it will create Facebookcoin, Amazoncoin, Googlecoin, and will be advertised as "real" and "safe" crypto coins, and people will not understand that they are not decentralized. What a pity...

[Bitcoinnation]

Whether he introduces it or not... we don't really care anymore. These social media platforms really acted like bitches last time out when they decided to ban cryptocurrency ads on their platforms.

[exstasie]

Hydrogen, am I missing the source of that quote or what?  Where did it come from?

I think this is the original article, from Bloomberg: https://www.bloomberg.com/news/articles/2018-12-21/facebook-is-said-to-develop-stablecoin-for-whatsapp-transfers

Anyway, I just learned more about stablecoins than I knew before, so this was an interesting article.  Since I'm not that familiar with them (but I understand the concept), I'm wondering why sending a Facebook coin would be more convenient than just using something like PayPal or a similar service.  I think even Indians working overseas can send funds back to India via PP friends & family for no charge.  The article doesn't exactly say that there's a problem that crypto in general is needed to solve, much less that an unproven, untested, not-yet-developed stablecoin is going to solve.  Are Indians finding it difficult to send money back home? 

I checked Paypal's site and it depends how much you're sending. If you send $500 via bank transfer, it costs a $5 fee + ~ 1% currency conversion fee. If you send $2,000 via bank transfer, it's free to send and the currency conversion costs closer to 0.5%.

The less you send, the more expensive. For people remitting $100, they're paying a 6% fee and that's before currency conversion. I'm sure the costs are different for different countries.

One thing to consider is what happens when Paypal bans your account. That's where decentralized platforms shine. I don't know if Facebook's stablecoin will be built on a something like Bitcoin/Ethereum or if it's something more centralized.

[d1ceplayer]

I doubt this is true. Facebook wouldn’t do such a thing, they don’t need cryptocurrency cause they wouldn’t consider it safe for their platforms users.

People can already send and receive money with Facebook, there is a feature to send and receive money in the Messenger app. If they want they will do the same for WhatsApp, but it won’t be anything to do with cryptocurrencies, these medias are fond of carrying fake news.

[aoluain]

I do still use whatsapp but it's almost a necessity and I feel that there's more safety in that.

There are many other open source and end-to-end encrypted instant messengers you can use, but I appreciate the problem is getting all your friends/colleagues/whoever to use them too.

Signal is the one I use. It is free, open source, and available for in android, iOS and desktop versions. It also supports voice, image, video and file sharing. There is also Wire which pretty much does the same things.

I use Signal but unfortunately the only people I know who use it are people in the cannabis industry (or otherwise involved in black or grey market activity). It's incredible how egregious the privacy violations are with major social networking apps, but nobody seems to care. Most people I talk to have no interest in using Signal. Messenger still seems really popular.

I also use signal to message privately with other crypto users i know.
I use whatsapp only for work related stuff as its the most popular
messenger so when someone wants to send info to me its
"Are you in whatsapp" facebook knew what they were doing when
they bought it!

I doubt this is true. Facebook wouldn’t do such a thing, they don’t need cryptocurrency cause they wouldn’t consider it safe for their platforms users.

People can already send and receive money with Facebook, there is a feature to send and receive money in the Messenger app. If they want they will do the same for WhatsApp, but it won’t be anything to do with cryptocurrencies, these medias are fond of carrying fake news.

I doubt facebook would do much in relation to their users safety,
This move would be for facebooks benefit.

[cabron]

Is this information  now confirm that facebook is indeed reating thier own cryptoccoin?

Some articles  I've read was that it says they are only ccreating stablecoin. Either of it,  its  still a good  indicator for invvestorss who  are looking a far of what wil  happen in the future. Blockchain is going ot be adopted no matter what.

[gentlemand]

It is very likely, and it will be the end of the crypto as we know it: it will create Facebookcoin, Amazoncoin, Googlecoin, and will be advertised as "real" and "safe" crypto coins, and people will not understand that they are not decentralized. What a pity...

These dollar tokens would - be centralised, tied to the dollar, reversible, blockable, seizable, and probably require a bank to actually spend outside their services.

I can't believe anyone registered here believes projects like this are in any way comparable. Just like centralbankcoin, they'll make the case for real crypto even more compelling.

[Barbut]

It is very likely, and it will be the end of the crypto as we know it: it will create Facebookcoin, Amazoncoin, Googlecoin, and will be advertised as "real" and "safe" crypto coins, and people will not understand that they are not decentralized. What a pity...

These dollar tokens would - be centralised, tied to the dollar, reversible, blockable, seizable, and probably require a bank to actually spend outside their services.

I can't believe anyone registered here believes projects like this are in any way comparable. Just like centralbankcoin, they'll make the case for real crypto even more compelling.

Apparently many people believe in projects like this one. I cant find thread I saw couple days ago, there is even a picture, about investing in tether, like it has chance to grow. How crazy people are can be seen on this forum very often.
I dont even wish to comment topics about facebook and cryptocurrencies, who cares about them anymore? Like you say even if they make one it will be facebook token, and some people know what facebook stands for. Now we have some nice decentralized social platforms, why not to try them and in same time earn something from that.