In May 2018, Facebook made one of the largest internal restructurings in the history of the company. In this sense, one of the measures that drew the most attention was the transfer of the current president of Paypal, and other senior officials of the company, to a special work team. According to communications issued by Facebook, said team would develop a project related to blockchain technology and its influence within the platform.
“The technological giant intends to activate a cryptocurrency exchange system in its online messaging platform.”
The blockchain is the technology used in systems such as cryptocurrencies to facilitate the free flow of data without the need for intermediaries. This kind of technology seeks the decentralization of personal data by granting access to all its users equally.
In this way, and according to a report published by the New York Times, the technological giant intends to activate a cryptocurrency exchange system in its online messaging platform. This system would facilitate the sending of money between users and would allow the mobilization of a currency that could acquire independence from its creative company, as in the case of Bitcoins and other independent cryptocurrencies.
Systems like this are not a novelty. In the United Kingdom, for example, the case of Venmo, the app that allows you to send money over the phone, is already very popular. However, the field of cryptocurrencies within messaging is still in development. The most consolidated case at present is that of WeChat, the Chinese messaging application that allows payments to be made within the same platform. Another more recent case is that of Kik, which in 2017 inserted its own cryptocurrency as a payment system.
In this sense, Facebook has a competitive advantage in the markets of developing countries. This is because WhatsApp, belonging to Facebook, is the most popular messaging app in regions such as India, where it is common to send and receive remittances between family and friends.
This approach was also pointed out by Ted Livingston, founder and director of Kik, in a publication he wrote on Medium. In that publication, Livingston points out that the sending of money abroad implies the movement of trillions of dollars annually and that its conditioning by high taxes and rates could be solved with the cryptocurrency of Facebook. The implementation of this platform would facilitate the sending of money to regions such as India, the Philippines, Egypt or Mexico, which are among the main recipients of international remittances.
Faced with this threat from Facebook, the company that owns WeChat, Tencent, has made efforts to promote itself in Indian territory and establish relationships with local banks to facilitate exchanges within the application. However, WeChat does not have enough market in India to get ahead of Facebook in the race for the insertion of cryptocurrencies into instant messaging.