Telegram is preparing to launch its own cryptocurrency
While Facebook’s far-reaching cryptocurrency plans are plagued by regulatory attacks, another major social network, Telegram, is coming forward with its own digital currency..
Telegram has told investors that it plans to send out the first batches of its Gram coin over the next two months. The New York Times was told about this by three investors who recently spoke with representatives of Telegram..
Telegram also plans to make Gram digital wallets available to 200-300 million global users of the Telegram messenger, investors said on condition of anonymity as they signed a nondisclosure agreement..
Telegram announced that Gram will become the new online currency and a way to move money anywhere in the world.
The scale of Telegram’s ambition was evident in early 2018 when it raised $ 1.7 billion from big-name investors, including some of the largest venture capital firms in Silicon Valley..
Unlike Facebook, which made public its plans for its own digital money long before the first token was ready, Telegram has largely continued development behind closed doors. This opacity could raise questions from government agencies that the company will face when it goes public with its coins..
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Regulators are increasingly worried that coins like Gram and Libra may, like bitcoin before them, be useful to drug dealers and money launderers.
US authorities have already taken steps to close small cryptocurrency projects, citing their violation of securities laws.
«Anyone trying to create this type of token system should be careful at any level with regulators, notes Richard Levin, who specializes in cryptocurrency law at the law firm Polsinelli. – I suspect that regulators will look very closely at this proposal».
Telegram spokesman did not respond to numerous requests for comment.
Telegram has always acted with some degree of disregard for government opinions.
The company was founded by Pavel Durov, a libertarian who, in his own words, fled Russia after a clash with the government and was forced to sell his first successful social network VKontakte. Mr Durov is now moving between offices in the Middle East and Europe.
The Telegram app makes it easy to send encrypted messages between phones. This made it popular among terrorists as well as government dissidents and demonstrators, for example, most recently during the protests in Hong Kong..
These qualities made him unpopular with the Iranian and Russian governments who tried to shut him down..
In its commercial proposal for Gram, which is being reviewed by The New York Times, Telegram stated that the new digital money will work with a decentralized structure similar to Bitcoin, which could make it easier to bypass government regulations..
Gram will be governed by a decentralized network of computers that will give Telegram no control over how and where coins can move..
«A whole new economy will be born, saturated with goods and services sold for cryptocurrency», – stated in a document sent to potential investors in 2017.
The plans for Gram have been met with considerable skepticism in the cryptocurrency community. Many of the largest venture capital firms that have invested in cryptocurrencies have missed the opportunity to invest in it.
Security researchers have also raised concerns about the coin due to the security issues Telegram had – issues that could have much more serious implications if money were involved..
But this did not stop the well-known American venture capital companies Benchmark and Lightspeed Capital, as well as many Russian investors from contributing to fundraising for Gram in 2018. Investors Allocated $ 1.7 Billion In Exchange For Coin Promise.
Telegram promised in legal documents that it would deliver the coins to investors by October 31, 2019 or return the money. The company is now rushing to issue coins ahead of schedule..
Some people will immediately be able to sell their Gram on cryptocurrency exchanges, although the very first investors agreed to a period of ownership.
Facebook’s Libra will be backed by traditional currencies held in bank accounts to stabilize the value of the digital coin. Gram, on the other hand, will not be backed by anything like Bitcoin, and will gain or lose its value if someone is willing to pay for it..
Telegram recently announced that a test version of the Gram network would be released a week or two before the official launch, investors said..
Gram is designed to be able to buy and sell other goods on Telegram.
The company also has big ambitions for its open Telegram network, which it hopes will receive new kinds of apps. For example, there may be new kinds of pages where users tip each other for good comments or make small bets on future events..
But before that happens, Telegram will have to deal with critics and skeptical regulators..
«I don’t understand how Telegram can actually get something regulator-compatible by the end of October.», – cryptocurrency analyst David Gerard recently posted on his website.