There have been reports that Facebook is working on a blockchain project. The reports come amid the social media giant’s hiring spree for blockchain experts and developers. Besides, a reports published by indicates that Facebook is creating a digital asset whose purpose is to enable transfer of funds via WhatsApp.
According to Coindesk:
“Citing anonymous sources familiar with the plan, a Bloomberg report on Friday said the company will first focus on the Indian market to let users transfer money via a dollar-pegged cryptocurrency on WhatsApp, the messaging app Facebook acquired in 2014. However, the report added the actual launch of the stablecoin could still be far since the initiative is at a strategic planning stage. Currently, WhatsApp has over 200 million monthly active users in India.”
Facebook formed a blockchain group eight months ago in a major staff shakeup and has been quietly recruiting additional engineers, product managers, legal experts and academics with experience in payments and cryptocurrency. According to a report from Cheddar, the company is actively sending staffers to conferences to recruit cryptographers and researchers.
In August, Facebook was looking for a blockchain expert with public policy and crypto experience, and has stated that their “ultimate goal is to help billions of people with access to things they don’t have now,” which “could be things like equitable financial services, new ways to save, or new ways to share information.”
According to sources speaking to Bloomberg, the project is still in the early stages and the coin is far from a full release. It has to finish finalising the strategy behind it, including a plan for custody assets, or regular currencies that would be held to protect the value of the stablecoin.
A company spokesman said in a statement:
“Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications. We don’t have anything further to share.”
A stablecoin is technically a cryptocurrency, although it is designed to be far less volatile than the likes of Bitcoin. Instead of accruing its own value, stablecoins are pegged to a fixed amount of real-world assets, such as fiat currencies like the dollar, or tradeable commodities like gold and metals.
This means a stablecoin is worth a specific amount in a given ratio to the asset to which it’s pegged. For example, if Facebook’s stablecoin is pegged to the US dollar at a ratio of 1:1, then one Facebook coin would be worth one US dollar.
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.