Facebook Inc. is looking at entering the cryptocurrency market with its own stablecoin, according to a new report.
Bloomberg, quoting people familiar with the matter, claimed the Facebook is designing the stablecoin for use with its WhatsApp messaging app, focusing first on the remittances market in India.
Stablecoins offer the benefits of a cryptocurrency, including digital exchange and smart contract support, without massive fluctuations in their price since the coin or token directly corresponds to a tangible asset, usually the U.S. dollar.
Facebook is said to be some time away from releasing the coin. The report said it’s still working on the strategy, including a plan for custody assets and what it will hold in reserve to guarantee the value of the coin.
It makes sense that Facebook would look to blockchain technology to implement a payments system, but it also comes with a small sense of irony. In January, Facebook banned advertising for all cryptocurrency products before partially rescinding it in June.
A shuffling of executive positions by Facebook in May also indicated that the company was interested in the technology, with a small blockchain technology team established under Chris Cox’s Platforms and Infrastructure team. That team is also responsible for app development, including that of WhatsApp.
WhatsApp, acquired by Facebook for $19 billion in 2014, has remained one of the world’s most popular messaging platforms, dominating much of the non-English-speaking world. As of October it had an estimated 1.5 billion users, 200 million more than Facebook Messenger in second place.
Although banking services continue to improve in the developing world they’re not always easily accessible to the poor, particularly in countries such as India. Implementing a stablecoin for payments that could be acquired through convenience stores, for example, would extend the ability to transact online to more people.