Move over Libra: Messenger app Telegram may be set to steal Facebook’s thunder with the debut of its own long-awaited cryptocurrency by the end of October.
The launch of the coin, dubbed GRAM, shows the ambitions of its libertarian, Russia-born, founder Pavel Durov, who built the app to send encrypted messages that no one can read except the intended recipient. The app is widely viewed as a more secure alternative to WhatsApp, as it has a number of additional security features including self-destructing chats, password protection and encryption using the MTProto protocol.
Telegram has amassed as many as 300 million users, becoming particularly popular among political activists. In Hong Kong, the app has been installed over 1.7 million times as that city endures widespread political upheaval.
GRAM will be built on top of Telegram’s own “Open Network” blockchain technology and will be a cryptocurrency in the purest sense, fully distributed with no central control. If every Telegram user signs up for a digital wallet, which stores cryptocurrency and is accessible via a private key, GRAM might quickly become a more widespread payment mechanism.
- Telegram last year held what was said to be the biggest initial coin offering, raising the equivalent of $1.7 billion in cryptocurrency.The Oct. 31 deadline for launching GRAM is partly driven by the ICO: if GRAM hasn’t been introduced by then, Telegram returns the investments.
- The launch of GRAM comes as Facebook plans to debut its Libra cryptocurrency, though the two are different. Libra uses the same underlying blockchain technology, but it will be controlled by a group of founding companies, and be backed by a basket of traditional currencies. GRAM, on the other hand, will survive based on Telegram’s confidence in it.
- GRAM likely will attract regulatory scrutiny when it begins due to concerns about its potential uses in money laundering, terrorism and buying illegal goods. A number of terrorist groups are reportedly enthusiastic users of Telegram’s messenger. To exacerbate concerns, unlike Libra, Telegram does not appear to have taken a proactive approach to working with regulators.
Karma Take: The addition of GRAM will complete Telegram’s suite of tools for users who want their business to remain private. But Telegram, and its backers, have to ask if the scrutiny of regulators is worth the trouble.