Facebook Might Launch Its Stablecoin Within 3 Months
The day when we’ll see a cryptocurrency made by Facebook is getting closer. The New York Times found out that the social media giant was preparing the launch of its own cryptocurrency in the first half of this year. It means that we might see the token in the next three months.
The Facebook Project is Almost Ready
At the end of 2018, sources familiar with the matter told Bloomberg that Mark Zuckerberg’s was developing a stablecoin that would enable users to transfer funds on the WhatsApp application, which Facebook owns. For those unfamiliar with the term “stablecoin,” it represents a blockchain-based digital currency backed by a fiat currency, generally by the US dollar with the ratio of 1:1. Think about Tether’s USDT or Circle’s USDC. The main purpose of a stablecoin is to reap all the benefits of a cryptocurrency while avoiding the price volatility.
The New York Times discovered that the company was already in talks with several cryptocurrency exchanges to list its upcoming coin. The information was confirmed by four people familiar with the matter. However, they chose to keep their anonymity due to the secretive nature of the project at the current stage.
The crypto community was expecting Facebook to issue another USD-backed stablecoin – one that would enjoy huge popularity as there are over 1.5 billion WhatsApp active users worldwide. Nonetheless, three sources said that the coin would be pegged to a basket of several fiat currencies, including the US dollar, euro, and other national currencies stored in FB’s banking accounts.
The sources revealed that the social media giant had hired over 50 engineers to work on the blockchain project, which is run by David Marcus, a former president of payments system provided PayPal. Facebook started to hire engineers for its stablecoin in 2018.
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,” a company spokesman told Bloomberg back then.
Facebook Coin Poised to Fail
Facebook will have troubles at operating its stablecoin – at least, this is what the head of a securities exchange believes. Mike Rymanov, CEO of DSX, reportedly said that the social media company couldn’t replicate the sophisticated structure and the success of Bitcoin.
Contrary to popular opinion, it’s Facebook that will fail where Bitcoin has prevailed.
The head of the London-base exchange stated that the main problem relates to regulatory limitations.
The regulators cannot regulate Bitcoin because there is nowhere to go, but regulators know how to access Facebook, only time will tell, but Facebook can’t launch a cryptocurrency in regulators’ backyards without being thrown out.
However, it’s hard to believe that Facebook is not aware of the regulatory approach and didn’t prepare for all potential scenarios. Besides, it is not the first major company in the US developing a stablecoin project. Earlier, we reported that JPMorgan, the largest US bank by assets, launched the JPM Coin, a stablecoin currently used by a few institutional clients only.
Facebook Has Rivals
The New York Times noted that Facebook was not the only social media company planning to issue its own cryptocurrency. Elsewhere, Telegram and Signal have been doing the same. The latter ones might launch their projects by the end of this year as well. The largest messaging app providers in South Korea and Japan, Kakao and Line, are also working on digital currency projects.
Eric Meltzer, co-founder of crypto-oriented venture capital firm Primitive Ventures, commented:
It’s pretty much the most fascinating thing happening in crypto right now. They each have their own advantage in this battle, and it will be insane to watch it go down.
Anatol has been writing for our news site for a year and is the newest member of our team. While he’s new to us, he’s certainly not new to trading with over 10 years’ experience being a professional financial journalist and working in the markets. Learn more.