Facebook Reportedly Developing Its Own Cryptocurrency

According to a Bloomberg report published earlier today, social network Facebook is creating its own cryptocurrency for money transfers within its highly popular messaging app WhatsApp.

The first time we got a hint of Facebook's interest in cryptocurrencies was on 4 January 2018 when CEO Mark Zuckberg said in a post on his Facebook page that one of his personal missions for 2018 was to learn more about this subject:

"For example, one of the most interesting questions in technology right now is about centralization vs decentralization. A lot of us got into technology because we believe it can be a decentralizing force that puts more power in people's hands. (The first four words of Facebook's mission have always been "give people the power".) Back in the 1990s and 2000s, most people believed technology would be a decentralizing force. But today, many people have lost faith in that promise. With the rise of a small number of big tech companies — and governments using technology to watch their citizens — many people now believe technology only centralizes power rather than decentralizes it. There are important counter-trends to this --like encryption and cryptocurrency -- that take power from centralized systems and put it back into people's hands. But they come with the risk of being harder to control. I'm interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services."

And then in May the world first found out that Facebook was getting serious about blockchain technology. On 8 May 2018, in a post on Facebook, David Marcus, the former head of Messenger, who was at that time also a board member (since December 2017) of crypto exchange Coinbase, revealed that he was leaving that role to set up a new group focused on exploring applications of blockchain technology across the whole of Facebook:

"After nearly four unbelievably rewarding years leading Messenger, I have decided it was time for me to take on a new challenge. I'm setting up a small group to explore how to best leverage Blockchain across Facebook, starting from scratch."

Later, on 11 August 2018, Marcus explained, in a statement given to Business Insider by a Facebook representative, why he was resigning from the Coinbase board:

“Because of the new group I’m setting up at Facebook around blockchain, I’ve decided it was appropriate for me to resign from the Coinbase board."

On 13 December 2018, Cheddar reported that Facebook’s blockchain group is planning to "potentially disrupt the entire payments industry":

"In recent months, the world’s largest social network has been quietly trying to recruit product managers, engineers, academics, and legal experts with experience in cryptocurrencies and payments, according to people familiar with the effort. Nearly 40 employees — including several former PayPal execs — work in Facebook’s ($FB) secretive blockchain group, and the company recently appointed a head of business development to oversee acquisitions and deals in the space. Since officially forming its blockchain group just eight months ago, Facebook has sent staffers to crypto conferences around the world to recruit researchers, cryptographers, and top academics in the field. At a private dinner Facebook hosted during a recent crypto conference, one attendee told Cheddar that Facebook employees pitched the idea of creating a decentralized digital currency for the social network’s 2 billion users."

Today's report from Bloomberg says that Facebook is creating its own stablecoin for sending/receiving money within WhatsApp:

"Facebook Inc. is working on making a cryptocurrency that will let users transfer money on its WhatsApp messaging app, focusing first on the remittances market in India, according to people familiar with the matter. The company is developing a stablecoin -- a type of digital currency pegged to the U.S. dollar -- to minimize volatility, said the people, who asked not to be identified discussing internal plans. Facebook is far from releasing the coin, because it’s still working on the strategy, including a plan for custody assets, or regular currencies that would be held to protect the value of the stablecoin..."

Anthony Pompliano, Founder and Partner at Morgan Creek Digital, expressed his personal opinion about this news via his Twitter account:

And the Co-Founder and CEO of crypto exchange Binance, Changpeng Zhao (also known as "CZ") had this to say:

 

Featured Image Courtesy of Facebook