Facebook sets to join crypto bandwagon via own currency

After studying blockchain for more than a year, Facebook is planning to launch its own virtual currency that would allow users to make electronic payments.

The social giant is serious about the concept of its own cryptocurrency, said cheddar report quoting a person aware of the development.

At present, the company is reported to be specifically focused on using cryptocurrency for facilitating payments on the platform.

It is also exploring ways to leverage the power of blockchain technology and many different applications, added the report.

Last week, Facebook had brought the vice president in charge of the Messenger app, David Marcus, erstwhile president of Paypal, to lead a new team to study blockchain and its future implications.

This is not the first time the social platform is experimenting with virtual currency. Earlier in 2009, it released Facebook Credits, which could be used to purchase virtual goods in popular games like Farmville.

Though, it never took off and led to shutting down in 2011.

In February during an interview, Marcus said it is very expensive and need some fixings.

"Payments using crypto right now is just very expensive, super slow, so the various communities running the different blockchains and the different assets need to fix all the issues, and then when we get there someday, maybe we'll do something,” Marcus said, who is also an early investor in crypto.

According to experts, in the time ahead Facebook will make acquisitions in the blockchain and cryptocurrency space to develop its own virtual currency. Blockchain technology could also be used to help Facebook verify the identity of accounts and encrypt data.

Notably, in India Facebook is currently staging beta test for its own payment product. It also had launched C2C Marketplace majorly for used goods in November last year. It plans to integrate the payment product with ‘Marketplace’.

Importantly, Facebook also introduced a feature that enables merchants to showcase their offerings and entice customers to transact through messenger. The Mark Zuckerberg-led company’s payment product is an independent play and will compete with WhatsApp UPI.

The social networking giant is eyeing to create a complete ecosystem through Messenger, Marketplace, Facebook, and payment. In India alone, there are around 270 million Facebook users, out of more than 2 billion monthly users worldwide.

However, in late January, Facebook in a blog post announced that it will ban any ads related to virtual currencies as misleading or deceptive ads have no place on the social networking site.

Cryptocurrency has too been facing flaks across the segments. In Feb, Goldman Sachs, in additions to many countries central banks, had cautioned investors against the fall in value of cryptocurrencies.