Facebook developing cryptocurrency for WhatsApp payments in India: Report

Facebook developing cryptocurrency for WhatsApp payments in India: Report
Mark Zuckerberg, Chief Executive, Facebook Inc  |  Photo Credit: Photo Credit: Reuters
21 Dec, 2018

Social networking firm Facebook Inc. is developing a crypto-based asset that will help users in transferring money for remittances via its planned WhatsApp payments platform, Bloomberg reported, citing people familiar with the matter.

According to the report, the Mark Zuckerberg-led company is looking to develop a crypto asset that will be much more stable than regular cryptocurrencies such as Bitcoin or Ethereum. The cryptocurrency is likely to be pegged to the dollar, making it more stable. These kind of cryptos are termed as stablecoins.

The report also said that Facebook was far from realising the coin since it had yet to ascertain a concrete strategy that would include plans for the custody of assets or pegging the crypto against fiat currencies.

However, what is more interesting is that Facebook-owned instant messaging platform WhatsApp's payments platform has been delayed for a long time after it hit regulatory and governmental hurdles following the disclosure of the Facebook-Cambridge Analytica imbroglio.

There has been a constant exchange of letters between the National Payments Corporation of India, the Reserve Bank of India, the information technology ministry and WhatsApp India, with the IT ministry first asking clarifications from the company on how and what it planned to store in India and what it planned to share with parent Facebook.

The last exchange accounted for WhatsApp India seeking reasons behind the delay in permitting the company to start its payments operations.

WhatsApp Payments is not Facebook's first play in the payments segment. The company has been long planning to make modes of payments available via its Messenger platform. Users in some countries can use PayPal on Messenger presently.

With its increased focus on payments, the social network had hired former PayPal president David Marcus in 2014 to run its Messenger business. However, in May, Marcus was made the head of the company's blockchain unit. Since then the company has hired 40 more people to lead its distributed ledger efforts, Bloomberg reported.

"Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology," the report cited a company spokesperson as saying. "This new small team is exploring many different applications."

However, WhatsApp Payments might turn out to be a very different ball game for the company as it has over 200 million users in India and the country leads the world in terms of remittances -- a whopping $69 billion for 2017.