According to a new report by the New York Times (NYT), Facebook’s “secretive” cryptocurrency project is making enough progress for it to consult with crypto exchanges about selling a Facebook token (“Facebook coin”) that could launch as early as in the first half of the year.
Published Feb 28 and referencing unnamed sources close to the matter, NYT said Facebook’s coin could be utilized by its Whatsapp messenger users to send funds over the messaging network instantly. Facebook is looking at pegging the coin to a basket of foreign currencies held in Facebook’s bank accounts, not just the US dollar.
In addition, Facebook reportedly intends to overhaul its messaging infrastructure to integrate the three apps it owns – WhatsApp, Facebook Messenger, and Instagram into a unified messaging platform. The process might take more than a year and will Facebook’s reach even further beyond the current 2.7 billion users of its apps every month.
Furthermore, Facebook is apparently also looking into ways to use blockchain to spread shared records of financial transactions across several computers as opposed to relying on a central player like PayPal or Visa.
A fiat-pegged Facebook coin, however, is most likely to be its first blockchain or crypto related offering, said sources, and possibly as soon as in the first half of this year.
Besides Facebook, other popular messaging platforms like Telegram, Kakao, Line, and Signal are also looking to integrate cryptocurrency-powered payments into their services. NYT noted that these companies have a reach that outshine other backers of earlier cryptos.
Facebook’s statement in response to NYT avoided direct mention of work on a digital coin, while the other companies declined comment.
NYT noted that Facebook’s effort led by ex-PayPal president David Marcus interestingly came shortly after Telegram’s eye-watering fund raiser of $1.7 billion in two private initial coin offering (ICO) rounds for its future token and blockchain platform Telegram Open Network (TON).
“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,” said Eric Meltzer, co-founder crypto venture capital firm Primitive Ventures.
Facebook’s project now has over 50 engineers on it, and their office comes with separate key-card access to preserve independent confidentiality even from other fellow Facebook employees.
NYT, however, wonders how much Facebook intends to control its coin. It argued that should Facebook want to clear every user transaction itself, it might not necessarily require a blockchain system over traditional processors like PayPal.
Getting help from crypto exchanges might then take off some of the regulatory load, but it will make it harder for Facebook to maximize its earnings off a coin it does not control as much, while also increasing the risk of the coin being abused by criminals.