The world's largest group of Internet messaging service companies are hoping to continue their efforts to provide encrypted digital money to mainstream consumers on the road to failure of the Encrypted Money Startup.
Internet companies, including Facebook, Telegram and ignal, are hoping to introduce new encrypted currencies in the next few years to allow users to send money to contacts through their messaging systems, similar to Venmo or PayPal in cross-border payment.
One of the most anticipated, but also the most confidential, projects comes from Facebook. People familiar with the situation said that the social network was developing a virtual currency that would allow users to immediately remit money to relatives and friends through the company's WhatsApp application.
People familiar with the matter said that Facebook's project had made enough progress, and they even communicated with the Encrypted Currency Exchange about selling Facebook coins to consumers.
Telegram, which has 300 million users worldwide, is also developing digital money. Signal, a popular encryption messaging service among technicians and privacy advocates, is also developing its own encryption currency. Kakao and Line, the biggest news apps in Korea and Japan, are also following the trend.
The antennae of this kind of message application are much larger than those of the early supporters of encrypted currency. Facebook and Telegram can promote digital wallets that support encrypted currency to hundreds of millions of users in the short term.
All these new projects are aimed at a market that has been confirmed to be popular with consumers. Venmo has achieved rapid development in the United States by simplifying mobile payment. In China, many consumers are also using Wechat's built-in payment system.
Facebook did not respond directly to questions about digital money in its statement, and other companies declined to comment on their projects. Most of them seem to be developing digital money that exists on distributed computer networks, independent of existing companies to some extent.
Like Bitcoin, new encrypted currencies can facilitate cross-border remittances, especially in developing countries where ordinary people are not able to open bank accounts and shop online. The design currently under discussion usually abolishes the energy-intensive mining process Bitcoin currently relies on.
But these news companies, like Bitcoin, may face regulatory and technological challenges as they move into the mainstream. Because of the lack of a central regulatory authority for encrypted money, it is easy for criminals to exploit it it, and the computer network design adopted to manage them makes it difficult to deal with a large number of transactions.
Despite the sharp drop in the price of encrypted currencies last year, these companies have invested a lot of resources in their own projects.
Facebook has 50 engineers working on the project, people familiar with the matter said. The Block, an industry website, has been tracking new positions listed in Facebook's project and has found that team size is growing steadily.
Facebook has been very secretive about the project. People familiar with the situation said that the team's office used access cards different from those of other employees. And
Facebook is considering several ways to use block chain technology. This technology originated from Bitcoin, which allowed people to share financial transaction records on several computers instead of relying solely on central payment systems such as PayPal or Visa.
People familiar with the status of Facebook's team said that the company's first product might be an encrypted currency linked to the price of traditional currencies.
Digital tokens with stable value can not be sought after by speculators, who are the main audience of encrypted currencies. But consumers can hold such tokens or use them to pay at any time without worrying about big fluctuations in the value of the currency.
People familiar with the matter said Facebook wanted to peg a basket of currencies, not just dollars. The company can guarantee its encrypted currency through a combination of dollars, euros and other national currencies in Facebook's bank accounts.
The company is also adjusting its messaging service architecture to connect three platforms, Messenger, WhatsApp and Instagram. This integration takes more than a year, and Facebook's digital currency can cover 2.7 billion active users of its platform.
The big question Facebook faces is to what extent it can control this digital currency. If the company is responsible for authenticating every transaction and tracking every user, it is difficult to determine whether it needs to replace PayPal's traditional centralized system with block chain system.
Working with the Encrypted Currency Exchange can at least help Facebook ease some regulatory burdens, as these exchanges will be responsible for holding encrypted currencies and reviewing customers.
But if Facebook uses encrypted currencies that it cannot fully control, it will be difficult to make money from transaction fees, and it will be difficult to avoid the use of such encrypted currencies by illegal elements.
Facebook employees have told the Encrypted Currency Exchange that they hope to launch a product in the first half of this year.
Other message companies'digital tokens are more likely to be similar to traditional encrypted currencies, using floating currency values and distributed design to provide users with more control.
This technology could help Telegram in places like Iran and Russia, where many users find it difficult to use traditional financial systems. Telegram sent a letter to investors last month saying that the company's Gram digital token has completed 90% of its key network elements.
People familiar with the situation said they also told investors that they hoped to release a system version in the coming months.
Signal, a message application focused on privacy protection, has also designed a small project called Mibilecoin. The company raised $30 million last year and is still trying a new round of $30 million.
But like other ongoing projects, Mobilecoin still needs to address the problems that make it difficult for other encrypted currencies to meet expectations.