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Facebook Reportedly Busy Making Stablecoin for WhatsApp Payments in India

  • Yuri Molchan
    📰 News

    Bloomberg reports that social media giant Facebook is developing a crypto coin to be used by WhatsApp fans, with the prior target at remittances in India


Facebook Reportedly Busy Making Stablecoin for WhatsApp Payments in India
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Resources familiar with the matter report that Facebook IT engineers are chasing the goal of creating a stablecoin in order to make the new asset less volatile than other coins in the market right now.

However, Facebook is not in a rush to launch the token, since the team is also working on the strategy and thinking of custody assets, which the new coin would be pegged to in order to support the actual value of the stablecoin, as in the cases of USDT, Gemini USD, Maker, etc. Mostly, the asset that supports those is the USD.


Facebook’s dream about to come true

Users have long believed that the social media giant has plans to expand to the financial market, especially after the company took on board the ex-president of PayPal, David Marcus, to supervise the work of Messenger back in 2014.

Then in May, the man was appointed as the head of Facebook’s blockchain division, whose targets have not been revealed publicly yet. Meanwhile, Facebook is actively hiring people for its blockchain department, boosting the staff with experts in the field.

Earlier this year, U.Today reported that Facebook was going to buy Coinbase and launch its own crypto coin. As we can see now, part of this was true after all.

What has been shared with the public so far is that the IT heavy-weight is looking deep into the opportunities of the DLT and is studying the numerous ways the technology can be applied.

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WhatsApp will provide the user-base

WhatsApp, the messaging app for mobile platforms that Facebook purchased a few years ago, is widely spread in India with the user-base totalling around 200 mln people. Besides, India is one of the global leaders regarding remittances. Last year, Indians working abroad sent back home nearly $70 mln.

Facebook itself can boast a user-base of 2.5 bln around the world. Experts believe that the IT behemoth with its $40 bln in yearly profits and being on good terms with regulators may stand a better chance of launching a stablecoin than other firms.

Still, the reputation of Facebook in India has been dampened, mainly because of WhatsApp, too – some fake news that appeared there through the messaging app caused severe cases of violence. However, India comes second after China in terms of the amount of web users, so there is enough space for Facebook’s new direction to grow there.

A U-turn on crypto

It should be noted that Facebook seems to have completely changed its position on crypto. It started from banning ads of ICOs and crypto currencies in general, as well as Twitter and Google calling these scams. But now the IT giant itself sees it is best to join the new trend rather than oppose it.

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It Could Take Bitcoin 22 Years to Retest Its ATH: UBS Analyst


It Could Take Bitcoin 22 Years to Retest Its ATH: UBS Analyst
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The fact that Bitcoin saw its price breaking above $5,000 at the beginning of April made everyone highly optimistic about the prospects of a full-fledged bull run. However, crypto bulls shouldn’t hold their breath since it could take decades for the number one currency to recover from its epic downfall.

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Bitcoin compared to other bubbles  

After comparing Bitcoin to other bubbles, UBS analyst Kevin Dennean came to a conclusion that BTC will most likely follow their lead, Business Insider reports.
However, here’s a catch – Bitcoin will have to undergo a long-lasting recovery, so it is not reasonable to expect another bull run in the nearest future. For comparison, it took the Dow Jones Industrials 22 years to reach its previous peak.   


‘We're struck by how long it took other asset bubbles to recover their peak levels (as long as 22 years for the Dow Jones Industrials) and how pedestrian the annualized returns from trough to the recovery often are,’ Dennean claims.

Bitcoin compared to other bubbles  

Picture: ©FactSet

With that being said, it is still not guaranteed that a certain bubble retests its ATH even after decades since a big burst. Nikkei, despite reaching its 20-year highs in October 2017, was still 50 percent lower than its ATH that was recorded in 1989.

Nikkei

Picture: ©ATLAS

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When you lose, you win

During the peak of the crypto market, Bitcoin was frequently compared to the infamous tulip mania, but these two barely had anything in common (except for the horrible stability of value). Hence, it hardly makes sense to apply a certain pattern and expect Bitcoin to behave in a similar fashion to other bubbles.

Historically, enormous price crashes actually benefited Bitcoin. As reported by U.Today, Bitcoin trader recently noticed that the BTC price rise 5.1-16.89 times every 70+ percent plunge. Crypto bulls have every reason to expect a similar outcome this time around.

'Shadow of bull statue on texture tiles floor metaphor of bull market is coming for stock market or investment asset' image by 123rf.

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