Facebook Is Developing A Cryptocurrency For WhatsApp Money Transfers: Report

Facebook may be looking to dabble in cryptocurrency-based payments solutions for its messaging platform WhatsApp, with a focus on its Indian users.

Quoting unnamed sources, a Bloomberg report has said that the US-based social networking giant is developing stablecoin — a type of cryptocurrency pegged to the value of the US Dollar  — to minimise the effects of volatility.

According to the report, Facebook is currently working on a plan for custody assets or regular currencies to protect the stablecoin’s value with a focus on the remittance market in India. The country is ranked first in terms of remittances with non-resident Indians sending $69 Bn (INR 4.84 Lakh Cr) back to India in 2017, according to World Bank data.

The report comes at a time when WhatsApp is caught in a tussle with Indian government authorities over multiple issues such as data localisation and spread of fake news.

The Facebook-owned company ran a beta test for its payments service earlier this year. However, it was later stopped as the government had ruled that the company will not be able to launch WhatsApp Pay till it sets up an office and recruits a team in India.

In December, WhatsApp CEO Chris Daniels put in a formal request seeking Reserve Bank of India’s (RBI) approval for WhatsApp Pay across the country.

In a letter to the RBI, Daniels reportedly said: “I write to request your formal approval to immediately expand WhatsApp’s BHIM UPI (Unified Payments Interface) compliant payments product to all users in India.”

WhatsApp’s Efforts To Get Government Nod

In a bid to tap on its 200 Mn userbase in India, WhatsApp has been working to comply with the rules and demands stated by the Indian policy makers.

In line with the government demands, WhatsApp is looking to open an office in Hyderabad and has also appointed Ezetap’s chief executive, Abhijit Bose as its India head. It has also appointed Komal Lahiri as its grievance office for India.

However, the company is still facing troubles on the data localisation front as RBI has stood firm on its directive which mandates that all fintech players must store user data locally on the Indian servers.

While WhatsApp built a data mirroring system to comply with the ruling, NPCI has said that the initiative will not be enough. It said that the company has not clearly stated if the user data will be stored only in India servers or will be kept outside as well. It also recently said that the company is yet to submit its timeline for submitting its data localisation plans.

[The development was reported by Bloomberg]