Could Facebook and WhatsApp’s Intention to Create a Virtual Currency Help Bitcoin’s Cause?
During the last few days, some rumors spread regarding Facebook launching a stablecoin to use with its messaging application WhatsApp. Although the news spread back in 2018, during the last days, new reports show that Facebook could be creating a stablecoin focusing on the remittance market.
It seems that corporate virtual currencies could start to gain a presence in the market in the coming years. One of the main questions that analysts ask is whether these kinds of digital assets will play a positive or negative role in the whole crypto market.
According to Bloomberg Facebook wants to offer remittance payments to India using a stablecoin backed by US dollars from its own company. At the moment, there are 200 million WhatsApp users in India and the country received around $69 billion in overseas remittances in 2017.
The developing world is the one that is currently searching for different ways to transact funds and have access to financial solutions. This is different from what developed countries need. Facebook could become a low-cost remittance model not only for India but also for other countries.
Of course, Facebook has been involved in many different scandals during the last years, one of them involving Cambridge Analytica. Users know that Facebook does not handle their information in a very private way compared to other companies and services. However, WhatsApp users do not generally know that WhatsApp is owned by Facebook.
According to Nic Carter, a partner at Castle Island Ventures, Facebook could be launching a decentralized virtual currency. This will provide a convenient way to move funds for WhatsApp users all around the world.
On the matter, he commented:
“FBcoin would further entrench Facebook’s control over its users, moving from the data realm to the financial realm, too. While some enthusiasm for cryptocurrency may be delivered to Facebook’s (presumably centralized) cryptocurrency, the value proposition for free, uncensorable, trust-minimized money, will remain the same, and even be augmented.”
According to a study released by the Cambridge Centre for Alternative Finance shows that 35 million people own virtual currencies as an investment rather than as a means of payment. At the moment, there are several regulatory agencies all over the world that are trying to have larger control over digital assets and virtual currencies. The U.S. Securities and Exchange Commission (SEC), for example, has been trying to control the Initial Coin Offering (ICO) market.
The Facebook coin could be just a new cryptocurrency that would allow millions of users from all over the world to have the first contact with virtual currencies. Whether users will later move to Bitcoin to protect their privacy or other digital assets, remains to be seen.
Clearly, if a user wants to have more privacy, then Bitcoin would be an option rather than the Facebook coins. It will be very difficult for Facebook to deal with the lack of trust that individuals have on its platform and how the firm handles users’ privacy. Bitcoin provides a better solution for these privacy issues that Facebook was not able to deal with.