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Ever since Bitcoin came on the scene in 2009 and paved the pay for a new cryptocurrency era, it has had competitors popping up everywhere. 2019 is no exception; after loud rumors, Facebook has indicated through various sources that they are working on their own cryptocurrency to rival Bitcoin.
The new cryptocurrency will be for users of WhatsApp, the popular secure messaging app owned by Facebook. The virtual coin will reportedly be used for money transfers within the app, and focus on India’s remittances market. The remittances market within India is significant, accounting for 2.8 percent of the countries GDP in 2017 – making it a potentially highly lucrative market for Facebook to tap into.
Adding to this, WhatsApp remains popular in India, where it has over 200 million users. This figure is expected to grow as India’s more rural regions gain internet capability at increasingly affordable rates. The affordable or cheap smartphone market is also strong in India, with prices of phones with relatively high functionality continuing to fall. The majority, almost all, in fact, of these affordable phones are Android-based, and WhatsApp is the preferred internet messaging services for Android users.
It’s not yet clear when Facebook will launch their stablecoin, but it isn’t likely to be soon since Facebook is still working on their strategy.
Facebook has a somewhat confusing history when it comes to cryptocurrency, sometimes appearing less than supportive of the industry. In Jan 2018 Facebook introduced a crypto ad ban (which was later partially lifted) to prevent “ads that promote financial products and services that are frequently associated with misleading or deceptive promotional practices.”
Over the last few years, Facebook has been hit with a number of scandals relating to their handling of user data, which has taken a toll on its share price. For some people, Facebook is becoming synonymous with shady privacy practices that seek to benefit advertisers more than users, something which is damaging Facebook’s reputation. By jumping on the crypto bandwagon, they have a chance to be a part of something privacy and security oriented, as well as grab a slice of the digital asset pie which is growing year on year.
In a blog post on the social network, Mark Zuckerberg, CEO and founder of Facebook, said:
“I believe the future of communication will increasingly shift to private, encrypted services where people can be confident what they say to each other stays secure and their messages and content won’t stick around forever. This is the future I hope we will help bring about.”
As to whether this crypto coin will truly rival Bitcoin, it’s far too soon to tell; however, Facebook’s huge user base does give them a good chance of making the digital coin mainstream.