The Financial Times reported yesterday that Facebook is quietly building a new electronic mobile money service. The system, which would launch in Ireland and be governed under the European Economic Area (EEA), would allow for “passporting” of user funds and essentially turn Facebook into an online remittance service.
If approved, Facebook’s system would allow users across Europe to convert fiat to a form of Facebook credit, transfer the funds to another user, and then convert the funds back into local currency. According to the Financial Times report, Facebook has spoken to remittance companies Azimo, Moni Technologies and TransferWire about supporting the service. Facebook declined to comment on the report.
According to a CNBC report, Facebook’s plans may extend far beyond Europe.
“Facebook wants to become a utility in the developing world, and remittances are a gateway drug to financial inclusion,” said a person familiar with the company’s strategy. Facebook recently passed 100 million users in India, which is its largest national market outside the United States.
If true, this would place Facebook in direct competition with PayPal and Google Wallet, and could create additional pressure against bitcoin adoption. The has been some speculation (inspired by comments made by ex-Facebook exec Chamath Palihapitiya at this year’s CoinSummit) that bitcoin’s infrastructure might actually play a role in the system Facebook is creating, either as an inspiration or as a direct component.