Social media giant Facebook is developing a cryptocurrency that will be pegged against the United States dollar, and is intended to be exchanged on Facebook-owned WhatsApp, according to multiple independent news reports. Facebook won't comment on the stories.
Bloomberg first broke the story of a "Facebook coin" in December, 2018, but there's a big New York Times followup out today that makes it clear this is a big deal, and that Facebook isn't the only social media giant developing a cryptocurrency.
This part, reported first by Bloomberg, apparently remains true:
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, the people said.
Facebook executives have been talking with various exchanges, reports the New York Times, and WhatsApp competitors Telegram and Signal are said to be developing coins of their own that would function similarly.
Nathaniel Popper and Mike Isaac at the NYT report that Facebook, Telegram and Signal all plan to "roll out new cryptocurrencies over the next year that are meant to allow users to send money to contacts on their messaging systems, like a Venmo or PayPal that can move across international borders."
The most anticipated but secretive project is underway at Facebook. The company is working on a coin that users of WhatsApp, which Facebook owns, could send to friends and family instantly, said five people briefed on the effort who spoke on the condition of anonymity because of confidentiality agreements.
The Facebook project is far enough along that the social networking giant has held conversations with cryptocurrency exchanges about selling the Facebook coin to consumers, said four people briefed on the negotiations.
Telegram, which has an estimated 300 million users worldwide, is also working on a digital coin. Signal, an encrypted messaging service that is popular among technologists and privacy advocates, has its own coin in the works. And so do the biggest messaging applications in Korea and Japan, Kakao and Line.
The messaging companies have a reach that dwarfs the backers of earlier cryptocurrencies. Facebook and Telegram can make the digital wallets used for cryptocurrencies available, in an instant, to hundreds of millions of users.