Facebook to launch its own cryptocurrency

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Facebook Inc. is reportedly planning to release its own cryptocurrency pegged to the U.S. dollar, initially for facilitating money transfers via its WhatsApp messaging app.

Bloomberg cited “people familiar with the matter” as saying that the social media giant will not be releasing its stablecoin anytime soon, but that when it does, it will be initially to cater to the remittance market in India.

A strategy is still being worked on regarding custody of the virtual assets and the fiat reserves involved, according to the financial news outlet.

Facebook has recently been advertising for job openings pertaining to blockchain technology, with Bloomberg counting some 40 people as part of the company’s blockchain team.

It also hired David Marcus, former president of PayPal, in 2014, appointing him vice-president of Messaging Products, and as of last April, head of blockchain strategy. He had previously served as director in the board of San Francisco-based exchange Coinbase.

WhatsApp has 200 million users in India alone, and is world leader of remittances, with about $69 billion sent back to the country in 2017, according to the World Bank.

Perhaps by the time Facebook’s coin is released, there will be a more stable market for stablecoins, several of which have been struggling of late. The most popular of them, Tether, has seen its market share among fiat-pegged coins drop from 94% to 74% as of this month, partly due to the entry of competitors, but it doesn’t help that the U.S. Department of Justice has launched an investigation questioning its connection to alleged manipulation of the price of BTC, which peaked at $19,000 last December.

In addition, Brazilian bank Deltec Bank & Trust, a partner of Tether Limited, issuer of the stablecoin, has been alleged by the country’s regulators to have a part in a money-laundering scheme.

Just last week, Basis, issuer of the stablecoin of the same name, announced it was closing due to regulatory difficulties it has faced. It will be returning $133 million to investors.