Facebook has been rumored for quite some time that they are about to dip their feet into the world of cryptocurrencies. Aside from being the top social media company, it is now looking to get a piece of crypto action these days. This time around, it seems that it is slowly becoming reality. The social media giant is planning to have its very own cryptocurrency that is going to be integrated into the Whatsapp app. The purpose is to make cross-border transactions a lot easier.
Unlike Ripple that targets banks, Facebook is looking to target individual users. The initial target of Facebook is India. India is known for its abundant number of Whatsapp users. India along with Brazil, Mexico, and Russia are among the countries that have a tremendous number of Whatsapp users.
However, it won’t be just like any cryptocurrency. Instead, it is going to be a “stablecoin”. A stablecoin is a cryptocurrency that is pegged at fiat. In most cases, Stablecoins are pegged 1 is to 1 against the US dollar.
Long Time Coming
This move by Facebook was highly anticipated. David Marcus who was the former President of PayPal joined Facebook and was in charge of running its messenger in 2014. By 2018, Marcus was then named as the head of Facebook’s blockchain initiative. Now, according to reports, the coin is expected to get launched by the first half of 2019.
It has also been reported that the Facebook cryptocurrency will be available on exchanges. But of course, Facebook isn’t alone in their venture towards the crypto market. You also have Telegram. Unfortunately, the secure messaging service has been favored by criminals including drug dealers and even by terrorists.
Why Focus in India
India is a perfect place to practice their cryptocurrency. Despite the fact that cash is still considered king in India, and the fact that crypto regulations are becoming difficult in the country as well, mobile technology is on the rise. It means that it is possible to get adopted by the general public.
Paytm dominated the mobile wallet market for India. In fact, the entire mobile wallet market in the country is at $400 billion. Paytm is partly owned by both Softbank and Alibaba. And right now, they have 300 million users.
Designed Against Wild Fluctuations
By now, everybody in the crypto market is aware of how wild fluctuations could get. In fact, during the 2017 Bitcoin boom, But since Facebook’s planned cryptocurrency is going to be a stablecoin, it can prevent problems such as huge fluctuations. Bitcoin after its near $20K peak lost around 80% of its value.
Now, the question is how it is going to be received in India? Last month, India’s Supreme court has issued an ultimatum in order to have a clear Bitcoin regulation in the country. The Supreme Court has issued a directive towards the Union of India to have a regulatory policy concerning cryptocurrencies in February 25.
Could this be a good time for Facebook to test their cryptocurrency in India? In reality, all over the world, crypto regulation is far from being clear. In fact, it has stopped many institutional investors from investing.