WhatsApp Launches Instant Cryptocurrency Payments in the US
macrumors.com
macrumors.com
Facebook has been trying to get payments into WhatsApp for a long time. This is just the latest experiment to try to find something that would be acceptable to local regulators while simultaneously extracting some value from the smoking ruins of the Libra/Diem/Calibra/Novi fiasco.
> "When you add money to your Novi account, we convert it to USDP (Pax Dollar), a stable digital currency issued by Paxos Trust Company, a regulated financial institution. USDP is designed to have a stable value relative to the US dollar. So on Novi, 1 USDP is equal to 1 US dollar."
To me that implies it's done on chain...I guess it could just be in their centralized database though.
Curious what the Whatsapp UI does for moments when USPD hits $0.99 like December 1 2021 when it hit $0.989.
Source: https://www.novi.com/WhatsApp
Multiple US regulators came to the same conclusion. One regulator said “well you usually create tethers 1:1 in response to deposits the vast majority of times and vast majority of amounts, but for the brief few times you didnt at least put a disclaimer up, also here is a fine for not having the disclaimer up”
This as quite often been in whole round billions in the middle of the night on a weekend ...
> people in the east actually deposit fiat into bitfinex
In non-convertible RMB?
I appreciate that the demand for a way round currency controls is a big driver for cryptocurrency, but I'm still not clear how that sustainably functions.
Are those country’s financial networks so primitive that a transaction message cant be sent on a weekend like in antiquated networks?
There is also other fiat than mainland RMB
USDT? Up and up, it has not once significantly went down [1]. Do people truly believe that they are pegged to treasury and money flows to Bitfinex (despite knowing it is BS) and that they've never been in a significant out-flow period? (Edit: There is one I notice in October 2018 of also nearly 50% from $2.8B, much later than the actual 2017-18 crash. Doesn't take away from the peculiarity of the rest of the chart, but gotta point it out in fairness.)
Anyone with significant money in crypto should be terrified by these sketchy money printers (the irony) rather than complacent of. If and when something like Tether blows up, these are dozens of billions in liquidity that will go poof over night.
[0]: https://coinmarketcap.com/currencies/paxos-standard/ (click market cap)
Frankly I am baffled it is still going, I think it has to do with it being the first, but can't understand it hasn't fallen apart since or been taken over by better designed stable coins. People called Bitcoin fairy dust, but at least its supply is determined by its protocol and its price by a market - poorly regulated as it may be. Tether is proper fairy dust, holding together thru sheer wishful thinking of this tacit agreement that it is worth $1 a pop.
The same standard would apply to Bitfinex. Only explicit tether redemptions for fiat at the issuer cause tethers do be destroyed. People just sitting in database-fiat on the exchange during a risk-off moment wouldnt cause tether redemptions.
If a more respected exchange like say TD Ameritrade issued a stablecoin upon every deposit, it would go up and up and up too, even in market crashes, as people use their investing accounts as value storage even in market crashes, anticipating to buy dips or wait for other market conditions.
also, why didn’t libra/the likes work out?
Partnering with a project that isn't Facebook helps with that (at least a little bit)
This is fundamentally a centralized system like wechat pay, an app you can't see in the West. If it's allowed it will be hugely successful.
The cultural/regulatory differences between china and western (free) countries means that (1) different models thrive differently and (2) pressure to centralize delivery through WeChat is there from the gov in china but not for the rest of the world. I think FB would love to be WeChat to avoid the App Store, but i'm not sure users would actually prefer that.
Addendum: Not that I'm a huge fan of the idea of crypto payments in Signal – I am not. But if the market (and especially the network effect of messaging apps) dictates it, what can they do? Moreover, I'm sure the Signal people looked into whether it'd be better/possible to move the payments feature into a second, optional app but there might have been architectural or security reasons not to do so(?)
Facebook Messenger already has this feature using fiat, Apple lets you send money via iMessage, Telegram already has this feature. Seems like adding payments is staying competitive with features other messaging utilities has. It might also be a money grab, but something can be two things at once.
That's a good point but: Do you know the wallets of all your friends? The advantage of Signal is that it knows your social network.
If you just wanted to send cryptocurrency, great, you use your normal method of doing it, making it something built into a chat client is at best nonsensical. It didn't need its own cryptocurrency offering, that part is just a cash grab that taints Signals mission.
https://a.uguu.se/BWssrjlJ.jpeg
Remember the Signal PIN which is used for recovery of your account? It now lets you recover all of your money too, so that's going to be a great target for spear phishing attacks. That feature got a lot of pushback because nobody could really work out what it was supposed to be adding to the software, turns out, useless cryptocurrency.
Just the PIN? Or do you need control of the phone number associated with the account?
If your other complaint is that Signal tried to make money, I hate to break it to you, but that's kind of, like, how capitalism works? If Signal runs out of money, Signal stops working.
I fully agree with you here but I'm 50-50 on your other statement:
> [There is] zero expectation that this is something users want, or will use.
It's not when you're invested in cryptocurrency.
As they say, cui bono?
So given that Facebook is also now mining data on every user of Whatsapp, should we reconsider Signal's stance on privacy? Or should the fact a horrible company is further ruining a once great app be irrelevant to what Signal should or shouldn't do?
Is this true? I thought they still had minimal insight into the data on the app.
I feel like I’m missing something. How is this system any different than a centralized system like PayPal or any other traditional payment system, where users have a USD balance and can withdraw it to their bank accounts?
If the company secretly removed the cryptocurrency backend and replaced it with a centralized database, would anything at all change for the users? Or would it be functionally identical?
WhatsApp has to play by the same banking rules as PayPal, so they’re not automatically exempted from the same regulations around prohibited transactions. These rules are still enforced at the bank layer.
Disagree with the notion they won't be shutting people out of the network when needed, that's not grounded in reality.
PayPal doesn’t have any fees if you send money as a “gift” (that is, forgo any fraud protections) and you don’t use a credit card.
Facebook is the only one with access to write to this chain correct? If so, they can shut people out of their chain by just disabling their Facebook, WhatsApp, or meta accounts. That’s grounded in reality
This isn't a grammar-nazi criticism because I frequently make similar mistakes with pluralization.
It strikes me that there must be some cognitive explanation for why some plurals seem to need an apostrophe when other plurals don't.
Do you have a link to any authoritative style guide that suggested “C.D.’s”? The Times' guide (2015) demands apostrophes to pluralize single letters: “the word has two t’s”. I think that’s silly, just as their use of quotation marks rather than italics for book titles.
Here is a quote from the 2015 edition of the Style Guide:
“G.I. The colloquial term, derived from government issue, for American soldiers. The plural is G.I.s”
https://afterdeadline.blogs.nytimes.com/2010/04/13/faqs-on-s...
You’re correct about Chicago (you do RC); at least my 1969 copy.
My 1959 Strunk and White doesn’t seem to have anything about this, but it also doesn’t have an index, so maybe it’s in there somewhere.
But, then why an apostrophe for t's and not for fees? :D It rhymes, it should be punctuated the same is as good a rule as any!
#1 Never apostrophe before plural-s.
#2 Always apostrophe before possessive-s.
Some weird possible exceptions noted in sibling comments (like apostrophe before plural-s on acronyms and single letters), but those aren't universal and therefore not mandatory. So if in (even the slightest) doubt, follow rules #1 and #2 and you'll be right far more often than wrong.
Oh yeah, one actually important and non-weird "exception": NO apostrophe "before possesive-s" on possessive pronouns like "his" or "theirs". I think this is because they're actually not ordinary nouns made possessive by adding apostrophe-s, but grammatically their own distinct words which happen to always contain an s at the end. So in that perspective, it's not even an exception; hence the quote marks.
And that ("it's") reminds me of rule
#3 Always apostrophe in contractions.
"Contractions" here means when a verb -- usually "is" or "has"; I don't know if (but don't think that) there are any others -- following a noun or a pronoun is reduced to its final 's' and added to the preceding word, as in e.g. "John's gone". You have to figure out whether the 's' stands for "is" or "has" from context: In "John's gone forever" it's "is", but in "John's gone and done it" it's "has". Usually it's pretty obvious, or doesn't really matter for understanding what's meant.
HTH!
To make this sound a bit less like mad conspiratorial ravings, could you flesh out how Whatsapp would allow Russian banks, government agencies, companies and oligarchs to move large quantities of money if they're disconnected from SWIFT?
For example, how would Russia get around the fact that Whatsapp is only offering this in the United States? How would Russians get fiat currency in and out? How would Russians circumvent the very low transaction limits?
And if you don't realise that Russian government / KGB is VERY MUCH behind Facebook and its initiatives, I'm afraid you have quite a bit of catching up to do.
Uh, I have to say, this is a new one for me. What's the theory here?
There have been reports on everything from "Christians for trump" groups to "abortions are a human right" groups. These accounts were used to spread disagreement and angst across the population. they even pit groups they owned against each other IRL [1]...
No evidence that russians were part of facebook but rather that they took advantage of the anonymity of the internet to pretend to be american and cause political divide (esp. during election times).
[1] https://www.businessinsider.com/russia-trolls-senate-intelli...
A far cry from what it seemed was being insinuated, as if the Kremlin had something to do with Facebook’s success.
How would Whatsapp's service with a $300 maximum transaction limit, that's only available in the US, allow them to evade a hypothetical disconnection of Russian banks from SWIFT?
Assume the goal is global wechat-like commerce. IMHO this is huge.
The regulatory interactions will be formidable because every country will want to get its fingers into this, money and who gets it is ultimately politics.
The crypto bit lets you work around locally broken financial systems, but a lot of negotiating with governments will still be required.
Privacy will necessarily be nonexistent, to get to global reach all transactions will have to be at least as legible as current bank transfers to involved governments. This is not "WhatsApp's fault" per se, it's just the world we live in.
Whatsapp has 2 billion users, PayPal and Venmo probably only small fraction of that.
On Whatsapp you already have your friends in the list, on PayPal I personally have nobody. It's an additional hurdle, I've never actually sent money to friend/family through PayPal.
However, thinking of this only in terms of this this will affect you is short-sighted, and apes other hot takes that went down in Internet history (HN on DropBox, /. on the iPod). The broader context for this (as discussed in other threads here) is what makes it interesting. Similarly, from a product POV, Twitter doesn't look like much - it's the users that are on there that makes it interesting.
They make it easy because they abstract away the underlying mechanics. Novi for WhatsApp does the same, but for a much, much larger audience, and does so instantly. While it isn't shackled by the baggage of the financial industry born in an era far removed from the current one, the pace of improvements and deployments can be much faster in face of changing regulations, jurisdictions, and technology itself.
International, fee-less, instant payments? With the amount of ecommerce that happens over WhatsApp and Instagram these days, Meta stands a very good chance with USDP to cut out the middle-men (all of the legacy financial infrastructure) and take the product straight to the consumers. Sure, Meta could partner with PayPal, but Novi is a better, if ambitious, bet.
With crypto under the hood, it becomes quite easy for competitors to build a remittance product.
"Some challenges" is doing a lot of work there. That's like saying that a hurricane's "a bit of water". If you're in Montana and don't have any family in Florida, you can blindly ignore the hurricane as it won't affect you. But realize that's a position of great privilege. For everyone else that can't get Paypal or Venmo or even US bank account in many case, or anyone who's Internet access is solely WhatsApp and not Venmo (due to Facebook providing free access to their properties and only their properties in certain countries), this is a total game changer.
The use of crypto in here just makes it more difficult to understand for the end user, or am I missing something?
Plausible claims to being exempted from the rules for a while?
1. Their own Paypal-like system
2. Partner with a Paypal
3. Their own cryptocurrency (ie Libra)
4. Partner with a cryptocurrency
Do I have that right? And for some reason #4 allows them to be global and not face antitrust concerns in the USA.
Had you told me in the 1980s that anonymous individuals would create thousands of new currencies backed for the most part by nothing at all, with the stated intent of evading all government regulation (what I would have called "crime" back then), and that the regulatory agencies would simply pretend it didn't exist, I would have laughed.
Transactions can be either off-chain, or on-chain. With former it’s not much different than a database, with latter it’s becomes scammer/terrorist/drug dealer dream.
Also on-chain transfer costs ~$20 in a quiet hour, e.g here is a transfer of ~$250 for a fee of $20: https://etherscan.io/tx/0x7d366b14c99ca6eb457109000f637e59bb...
USDP whitepaper: https://insights.paxos.com/hubfs/USDP-whitepaper.pdf
Contract source: https://github.com/paxosglobal/usdp-contracts
Etherscan: https://etherscan.io/token/0x8e870d67f660d95d5be530380d0ec0b...
However, I'm a total rookie when it comes to crypto, blockchain etc. and giving a company that permabans via ai with no human fallback control of payments seems like a bad idea to me.
It's a long-shot, I know but I thought I'd chuck it out there. I wanted to find out if there is a potential genuine benefit to this system without all the anti-FB stuff getting in the way.
Which negativity has been brought to us by Facebook...
Considering that to this date blockchains and cryptocurrencies have not solved a single problem better than their "legacy" counterparts, I'd say the former.
Interesting how this is being promoted.
20x larger scale means 20x more clout to bribe/lobby lawmakers and to get around the KYC/AML rules that are the main obstacle in these sorts of things.