Some of the world’s biggest internet messaging companies are hoping to succeed where cryptocurrency start-ups have failed by introducing mainstream consumers to the alternative world of digital coins.
The internet outfits, including Facebook, Telegram and Signal, are planning to roll out new cryptocurrencies over the next year that are meant to allow users to send money to contacts on their messaging systems, like a Venmo or PayPal that can move across international borders.
The most anticipated but secretive project is underway at Facebook. The company is working on a coin that users of WhatsApp, which Facebook owns, could send to friends and family instantly, said five people briefed on the effort who spoke on the condition of anonymity because of confidentiality agreements.
The Facebook project is far enough along that the social networking giant has held conversations with cryptocurrency exchanges about selling the Facebook coin to consumers, said four people briefed on the negotiations.
Telegram, which has an estimated 300 million users worldwide, is also working on a digital coin. Signal, an encrypted messaging service that is popular among technologists and privacy advocates, has its own coin in the works. And so do the biggest messaging applications in Korea and Japan, Kakao and Line.
The messaging companies have a reach that dwarfs the backers of earlier cryptocurrencies. Facebook and Telegram can make the digital wallets used for cryptocurrencies available, in an instant, to hundreds of millions of users.
All of the new projects are going after a market that has already proved popular with consumers. Venmo has taken off in the United States by making it easier to send payments by phone. And in China, many consumers use the payment system that operates inside the hugely popular WeChat messaging system.
“It’s pretty much the most fascinating thing happening in crypto right now,” said Eric Meltzer, the co-founder of a cryptocurrency-focused venture capital firm, Primitive Ventures. “They each have their own advantage in this battle and it will be insane to watch it go down.”
The companies all declined to comment on their coin projects. Most of them appear to be working on digital coins that could exist on a decentralized network of computers, independent to some degree of the companies that created them.
Like Bitcoin, the new cryptocurrencies would make it easier to move money between countries, particularly in the developing world where it is hard for ordinary people to open bank accounts and buy things online. The current designs being discussed generally do away with the energy-guzzling mining process that Bitcoin relies on.
But the messaging companies are likely to face many of the same regulatory and technological hurdles that have kept Bitcoin from going mainstream. The lack of a central authority over cryptocurrencies — a government or bank — has made them useful to criminals and scammers, and the designs of the computer networks that manage them make it hard to handle significant numbers of transactions.