As the Crypto News Review article reports, the rumored Facebook crypto solution is said to target users in India. Deploying a payment solution in India is relatively straight forward using the National Payments Corporation of India provided Bharat Interface for Money (BHIM) App and is already connected to WhatsApp today. It will be interesting to see if Facebook is able to create its own currency and have that currency accepted in India or elsewhere:
“WhatsApp is zeroing in on India to test a way into the cryptocurrency market…
Developments continues behind the mysterious closed doors of Facebook over a possibly cryptocurrency for the social media giant. However, one of Facebook’s companies – WhatsApp – may be bearing the first fruits of said work.
It’s now been revealed that WhatsApp is looking to introduce a new digital payments system – a posh way of saying cryptocurrency – that’s initially going to be focused on India. The aim of the currency will be to process transactions, in effect legitimizing such transactions that are already taking place to some degree on the service.
The attraction of India is that WhatsApp enjoys a very heavy userbase in the country. Furthermore, it’s also a nation that attracts a lot of digital financial transactions. It’s estimated, as per a report at Bloomberg, that people sent nearly $70bn to friends and relatives living in India, from elsewhere in the world. WhatsApp – and Facebook – want a piece of that.
The aim will then be to roll the work out into other markets that are developing, but for India to be the testing ground for the work. This all follows months of speculation after Facebook went on a blockchain staff hiring spree earlier in the year. The company is now believed to have a blockchain development team number just shy of 50 people.
Facebook hasn’t made an official announcement as to what it’s up to just yet, but the wise money is now edging towards a release for the service in 2019. We’ll keep you posted.”
No small problem with existing crypto is the lack of liquidity – the ability to quickly and easily satisfy the holder’s needs using said crypto. There have been attempts that include e-commerce merchants accepting crypto payments online via a Coinbase. Perhaps someday in the US you may even be able to connect crypto currencies to a Visa card, but so far existing solutions are limited. MCO is available in Singapore, TenX has yet to ship its card, and Nexxo tries to dodge regulatory complexity by issuing credit to enable the card payments and then accepting crypto as a way to pay the balance. The two key challenges for Facebook to bring a similar service to the US is that there is no service similar to BHIM in the US and US regulators have yet to identify a path by which crypto can enter the US market. That said, getting experience in India and refining the business and regulatory model there makes good sense.
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group