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Facebook reportedly making a stablecoin cryptocurrency for WhatsApp

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There's a lot of money in money.

Facebook is working on a cryptocurrency for use through WhatsApp, "according to people familiar with the matter" according to Bloomberg.

It's still early days though, they say, with plans currently focused more on discussing potential designs for the coin rather than actually building it, they say. Specifically, it's suggested that Facebook is exploring custody of assets to collateralise its planned stablecoin.

Facebook's comment on the matter was appropriately broad:

"Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology," a company spokesman said in a statement. "This new small team is exploring many different applications. We don’t have anything further to share."

"Small" in this case is said to be at least 40 people, Bloomberg suggests, based on the employee titles on LinkedIn.

WhatsApp remittances

The expected application is said to be WhatsApp remittances it's suggested, with India in particular being a promising market for the new system thanks to its abundant WhatsApp users and position as the world leader in remittances. People sent $69 billion home to India in 2017, according to the World Bank.

The stablecoin design might be an appropriate choice to duck the volatility associated with cryptocurrencies and create something people will be more fond of using. And a collateralised stablecoin in particular might be an ideal way to avoid unwanted complexities as well as the regulatory pressures that come with unintentionally creating a security, as the recently-shuttered Basis stablecoin project experienced.


Although it's still early days, it might be a striking example of the convergence of technology and banking, with both areas moving towards each other apace. Banks are tech companies these days, and by the same token tech companies are seeing how they can turn into financial institutions. The position of a tech company that releases its own currency, collateralised by assets kept in custody, might make it most akin to a bank, or even a central bank at the most extreme end of the scale.

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And while banking is an extremely lucrative business, being a central bank and actually issuing a currency of your own might be something else entirely.

While it's a dramatic development, Facebook will still be a relative latecomer to the space. There may also be few clear reasons, except profitability and control, and perhaps regulatory concerns, why Facebook would opt to go through the effort of developing its own cryptocurrency rather than allow WhatsApp to integrate with existing blockchains for the transmission of existing cryptocurrencies. It seems like if Facebook really wanted, it could probably implement reliable cryptocurrency transmissions into WhatsApp in a few days flat. It's already mostly as easy as a browser extension.

But custody of customer assets, and the headaches associated with private keys, might be something else. And given Facebook's track record for data security, it might prefer to avoid holding user private keys if it can possibly help it. With great profits comes great responsibility, as they say.

Still, that industry giants might prefer the control of developing their own cryptocurrencies and platforms rather than building on existing ones might mean the market for the solutions being touted by emerging blockchain projects isn't as big as it may initially appear.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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