Facebook Sets Its Eyes on Indian Money Transfer Market Using Crypto

Social media giant Facebook is all set to step into the crypto space next as it is reportedly working on a new cryptocurrency money transfer application that will be implemented into its messaging app, WhatsApp. The service is set to launch in India and is going to help pay remittances.

WhatsApp is apparently developing a stablecoin for the money transfer application and the value of the currency is going to be fixed to the US Dollar, according to a Bloomberg report. A fixed exchange rate will protect the coin from volatile shifts in its prices like Bitcoin once went through when its price shifted by 10 percent over 48 hours.

Although this project has only recently come into public view, Facebook has been carrying out research on Blockchain and digital currencies for quite some time now. Former President of PayPal, David Marcus was assigned the position of head of a research unit for the company in May. Marcus is also the Vice President of Messaging Products for Facebook. With a 40 member team for the group, he is believed to have played a key role in the company’s entry into the cryptocurrency sector.

Facebook is reported to be on a hiring spree to build up its crypto-blockchain research and development team, which is currently comprised of former PayPal and Instagram execs. Some Facebook employees have also been recruited and including Geoff Teehan, who is Head of Product Design and Morgan Beller, a member of the Corporate Development team at the company.

The main reason for the company targeting India first is because India is currently the highest-ranked country in terms of remittances from abroad, with a 9.9 percent increase from last year’s report. With 200 million WhatsApp users and a 28 percent market penetration, it seems that it was a no-brainer for the company to start here.

WhatsApp’s CEO, Chris Daniels had reportedly sent a letter to the Reserve Bank of India in early November if this year, asking for permission to extend payment services to its users in the country. The letter sought for the approval of the BHIM UPI (BHarat Interface for Money Unified Payments Interface). The company is also working with the National Payments Corporation of India (NPCI) to meet the regulatory demands required to enable payments in the country and has also started to slowly implement recommendations that it received from the RBI regarding data storage and unhindered access to payment receipts for the RBI.

WhatsApp had already started its beta testing for the payment platform in February in collaboration with ICICI Bank, but ht e Cambridge Analytica scandal forced the RBI to take a step back and reconsider its recommendations. As a result, the social media giant was forced to overhaul its project.

However, if and when WhatsApp gets the permission from the Indian government to commence payments, it will probably become the leading fund transfer platform in the country, given its gigantic user base.