Facebook
The coin will operate through WhatsApp. The first operational target will be the remittances market in India, through which $69 billion was transferred to India in 2017. The reason for this is that India has over 200 million WhatsApp users and therefore provides the biggest scope for beta testing.
Facebook has been elusive about its new venture: "Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications. We don't have anything further to share," it said in a statement.
Stablecoin is gaining popularity because it is pegged to a fiat currency, and therefore not as susceptible to aberrations in valuation and the high level of volatility characteristic of cryptocurrency.
In fact, given that Facebook hired former PayPal
Chatting apps that employ the use of crypto are not rare: Line, which is popular in Japan, has its own coin called Link that can be used to trade and invest. Status, a decentralized chat app, obtained more than $100 million in Ethereum funding in 2017.
Jon Russel of TechCrunch says: "Fintech is booming in emerging markets where digital platforms and data can help overcome limited credit scoring systems and low banking rates, but Facebook hasn't really stepped into the ring. Its sole move has been with WhatsApp, and has already implemented peer-to-peer transactions in India, so global money transfers and other financial features can make sense."
Prior stablecoin booms haven't lasted very long, especially not in the chat space. Concerns over reliable financial backing and security plagued Tether and Basis, for example. However, given Facebook's scale and position as an international tech company, it may be able to raise the finances required to sustain such a project over the long term.
If this stablecoin venture becomes a success, it may endow the crypto market with much-needed and long-sought credibility. It may also help stabilize the haywire prices that investors are currently seeing by providing a concrete example of an asset class grounded than crypto bubbles.