By Kate Rooney, CNBC
Facebook is reportedly working on a cryptocurrency for global payments.
The social media giant plans to use a digital currency to focus on small payments in India, Bloomberg reported citing people familiar with the matter.
But it’s not using bitcoin. Instead, the tech giant reportedly plans to use a “stablecoin,” a digital currency pegged to the U.S. dollar. Cryptocurrencies have been marked by volatility this year, often seesawing 10 or 15 percent in a single day. Stablecoins however mirror the price of a government-backed currency and could solve the issue of volatility.
Facebook did not immediately respond to CNBC’s request for comment.
The company’s hiring of former PayPal President David Marcus sparked rumors that Facebook would eventually dive into financial services. Marcus moved to Facebook to run its messenger app in 2014, and now runs the company’s secretive blockchain initiative.
Facebook is one of many tech and financial services giants at least exploring blockchain, the technology underlying bitcoin and other cryptocurrencies. Amazon, J.P. Morgan, Walmart and IBM are among other well-known companies testing the technology. Its potential has been compared to the internet but so has its hype.
Still, few established U.S. companies have embraced cryptocurrencies themselves. CEOs from Jamie Dimon to Warren Buffett have bashed bitcoin and warned investors of the speculative bubble as it ushered in retail buyers last year. The world’s largest cryptocurrency is down more than 70 percent in 2018 alone, according to data from CoinDesk.
Facebook-owned WhatsApp has gained traction in India, where remittance payments are big business. According to the World Bank, people sent $69 billion from other countries into India last year.
— Read the entire Bloomberg report here.