VKontakte looking to create its own cryptocurrency

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Pavel Durov has found himself at odds with the Russian government of late, battling to keep his enterprises free from governmental intervention. Last year, his social messaging service app, Telegram, announced that they would be pulling out of Russia after the government threatened to lock them out from being able to operate unless they supplied their encryption keys. Instead, the company refused and simply stopped providing support in Russia.

This came months after Durov expressed his concerns about the government banning or restricting the use of digital currencies. Durov is also the founder of VKontakte, the Facebook of Russia. He explained at the time that such a move was intended to try to hinder steps to decentralize the global financial system.

Now VKontakte is making a major move, looking to create their own cryptocurrency. While the final decision has not been made on producing the digital currency, sources at the social networking giant informed RNS of plans to begin developing the currency.

If the company decided to develop its own currency, they would not be the first social networking giant to do so. Facebook is already working on their own digital currency, Facebook coin. In addition, programmers at Telegram are working on new blockchain technology to assist in the efficiency and security of the platform.

The purpose of the new currency, according to sources at VKontakte, would be to provide commercial exchanges and payments between users using the social media platform. The ultimate goal of VKontakte was to compete directly with Facebook, but governmental intervention led the Durov brothers to sell the website and focus solely on Telegram.

The plan is an ambitious one. They would issue their own cryptocurrency which would then be used to make payments using their payment system referred to as VK Pay. Using the new blockchain technology created for Telegram, they would be able to provide a secure system to accept payments while allowing users to also earn digital currency through the website.

Users would be able to earn cryptocurrency simply by spending time on the social networking site. Over time, the currency could be transferred or converted to other forms of payments.

VKontakte is the largest social networking site in Russia, with 97 million users actively using the site each month. According to the company, 6.5 billion messages are exchanged each day, a significant amount that should give its users the opportunity to earn income solely by increasing their presence on the network.

VKontakte has not formally announced any plans to create their own digital currency, but neither did they deny such plans are in the works. With Facebook already making the move in this direction, it would only make sense for the Russian-based social networking site to try to directly compete against them. What kind of government intervention could stand in the way of their operation is yet to be seen.