Cryptocurrency and messaging apps are a perfect combination. At least, that’s what a lot of companies that run messenger apps think. Some apps, such as Signal or Telegram, have already rolled out their first cryptos for users. How does that work, and what is the current status of introducing cryptocurrencies on different messaging apps around the world? An overview.

Imagine you are just finishing up your online gym class with your personal trainer on WhatsApp. After the class, you send them a thank you note in your chat, and, in the same chat, also pay them for the class — using a cryptocurrency.

This is not a reality yet, but it could be in the very near future. From Apple to Telegram to Viber, a lot of messenger companies are currently looking at introducing cryptocurrencies on their apps, and some first movers have already rolled out crypto payments for their users. How does that work exactly? Is this a good idea? And what messaging apps are already using cryptocurrencies? We sum up the most important facts, and show you what messenger apps around the world are offering.

Cryptocurrency: What is that, and what does it have to do with messaging?

Simply put, a cryptocurrency is a digital currency or medium of exchange that is transferred through computers. As the name implies, cryptocurrencies (also known as cryptos) are protected by cryptography, which makes it basically impossible to hack, counterfeit or manipulate payments.

Unlike regular (fiat) currencies, such as U.S. dollars or Euros, cryptos are not controlled by a central institution like a bank, which means, in theory, that they can’t be manipulated by governments. Instead, they run on decentralized networks based on the blockchain technology.

How does the blockchain work?

The blockchain is basically an online ledger that keeps track of transactions in the whole network of a specific cryptocurrency. It can be best visualized as a chain of blocks. Every block holds information about a set of transactions. Each block’s information is connected and verified by the two blocks next to it in the chain.

If a new block is added, the information of this particular block has to be first verified independently by all nodes in the network through specific mathematical methods. Only then can it be added to the existing chain. This makes it impossible to forge transactions on the blockchain, which makes the blockchain both transparent and secure.

Of course, you can have all sorts of transactions on a blockchain, but because of its safety, it is the technology of choice for trading cryptocurrencies, such as Bitcoin or Ethereum (the two largest currencies).

Trading tokens

For trading cryptos, both sides need a (digital) wallet. In order to transfer, for example, Bitcoins from one person to another, a person opens their wallet, chooses a public address of someone else’s wallet, sets the amount they want to send, and then hits “send”. After the transaction is verified on the blockchain, the other person will receive the tokens.

A natural evolution of this process is to set it entirely on a messaging app. Why? Because that is where most people nowadays decide to manage most of their digital processes.

Cryptocurrency and messaging apps: A match made in digital heaven?

The massive use of messaging apps becomes apparent when compared to the total number of internet users around the world. As of April 2022, five billion people around the world use the internet. In comparison, roughly three billion users are active on mobile messaging apps. In other words: most people that use the internet, are also messaging.

In an interesting development, people are not just chatting with friends and family on WhatsApp, iMessage, or WeChat anymore. They are also looking for information, read news, and look for shopping inspiration.

Connecting the possibility to transfer cryptocurrencies is therefore the next logical step. It would also open up many new possibilities for using messaging apps, such as wiring tokens to friends, paying freelancers for services, and conversational commerce.

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Furthermore, both, cryptocurrency and messaging apps (through their end-to-end encryption) stand for secure interactions that can’t be hacked. That’s why first messaging services have started adapting cryptocurrencies on their apps.

Not surprisingly, Meta was one of the first companies to think about integrating cryptocurrency with messaging apps.

Meta started its cryptocurrency project Libra (later: Diem) in 2019. Up until January 2022, the company was determined to launch its own Diem currency and enable transactions on the Messenger from Meta and WhatsApp.

However, after strong political pushback amid privacy concerns around the company, the outside resistance was too strong. Diem confirmed the shutdown of the project on January 31 of 2022, and ist sale to the Silvergate Capital Corporation.

For now, according to the Financial Times, Meta supposedly has plans for a virtual in-game currency (similar to what is already used in games, such as Fortnite) that has been coined “Zuck Buck”, named after Meta’s CEO Mark Zuckerberg. Meta itself has not directly confirmed these plans. A Meta spokesperson has said though that the company is “focused on building for the Metaverse, and that includes what payments and financial services might look like.”

Apple’s cryptocurrency plans

In many ways, Apple is already better prepared for combining messaging and crypto payments than most of its competitors. With Apple Pay and the Apple Wallet already in place, it would not be a far stretch for Apple to implement cryptocurrencies on iMessage as well. Many actually think that this would be the next logical step for the company, especially with its renewed focus on privacy.

However, as of now, Apple has not officially announced any concrete plans for launching a cryptocurrency or enabling payments on iMessage. However, in an interview, Apple CEO Tim Cook said:

It’s something we are looking at, it’s not something we have immediate plans to do.

Tim Cook, CEO at Apple

So, it’s possible that in the future, Apple will come out with its own crypto plans.

WeChat’s cryptocurrency plans

After China’s recent bans on cryptos, China’s most popular messaging app, WeChat, that is owned by Tencent, seems even further away from launching cryptocurrency transfers on its service.

However, in January 2022, WeChat announced that it will be supporting transfers of China’s own digital currency, the digital yuan. As the digital yuan is not a cryptocurrency, it has no special encryption, but it still is a move into the direction of enabling digital transfers on a messaging service.

Whereas outside of China, the app is not very popular, it’s huge among Chinese users, and not only for messaging. The app has become a one-stop-shop for pretty much anything, like ordering food or even taxis. Adding payment options directly within the app, is therefore a smart move for WeChat, and will probably make it even more attractive for users and businesses alike.

Kakao’s cryptocurrency “Klay”

In another Asian country, the South Korean tech company Kakao merged their crypto wallet “Klip” with their messenger app KakaoTalk in 2020. Through Klip, users of KakaoTalk can now send eleven different cryptocurrencies and even NFTs through the messenger service.

Apart from external crypto tokens, such as Box, BlockPet, Pibble and many others, users can also transfer Kakao’s in-house token, Klay. It runs on Kakao’s own blockchain, Klaytn. Unlike other cryptocurrency exchanges, though, Kakao wants to make the transfers so easy that even people that have never dealt with cryptos before, can get started right away.

We have focused on the development of a digital wallet that is easy and comfortable enough to be used by people who have not had experience with blockchain technology.

Jason Han, CEO Ground X (the blockchain subsidiary of Kakao)

So, instead of the regular transfers through wallets and public addresses, the Klip wallets will be linked to the users’ bank accounts, which is easier and doesn’t add fees to the process. The private keys of the users will also be managed by Kakao’s Key Management Service who will be saving the (encrypted) keys. The idea is that the keys will be safe, while users won’t have to worry about loosing or managing their keys.

In South Korea, KakaoTalk is the most used messaging app, with a market penetration of around 90 percent. Similarly to WeChat in China, adding digital currencies to its portfolio, Kakao will be able to increase the usage of its service even more.

Viber’s cryptocurrency plans

As far as merging cryptos with messaging, Viber was one of the first messaging apps to launch such a service in 2019 in Russia. Viber, who is owned by the Japanese company Rakuten, and became famous as the FC Barcelona’s official communication channel, is one of the most popular chat services in Russia with a monthly audience of 45 million users (70 percent market penetration).

Along with plans to launch an e-commerce platform in Russia in the fourth quarter of 2018, Rakuten announced that Viber would also include the transfers of its own cryptocurrency, the Rakuten Coin. The plan was for Viber users to be able to trade U.S. dollars, Euro, Russian Ruble and the Rakuten Coin directly on the messenger app.

For Rakuten, this was not the first time to experiment with cryptocurrencies. The Japanese tech giant was the first messaging app to accept Bitcoins in 2015.

Telegram launches Toncoin transactions

In April 2022, Telegram opened up its messaging platform for cryptocurrency transactions of the Toncoin token. Similarly to KakaoTalk, the transfers work in conjunction with a wallet. In the case of Telegram, users create a wallet through Telegram’s own wallet bot.

The transactions happens directly in a chat. Once a user wants to send cryptos, they pull up the wallet from their attachment menu, enter the amount of Toncoin they want to send directly in the chat, confirm the details, and then send it. The other person will receive Toncoin directly in the chat as well.

According to TON, the blockchain project the Toncoin runs on, there will be no fees for these transactions.

The TON project is actually an abandoned Telegram project from 2018. It was initiated by Telegram CEO Pavel Durov and his brother Nikolai. However, as the platform failed to meet the U.S. Securities and Exchange Commission’s (SEC) registration requirements for the coin (then called “Gram”), the project was shut down in 2020.

However, a group of dedicated developers decided to keep the project alive, and rebranded it as “The Open Network” with “Toncoin” as its new token. The efforts were supported by Durov. In April 2022, the TON Foundation was able to raise one billion U.S. dollars in donations for its project.

Signal’s cryptocurrency plans

One of the messaging services that is determined to combine the security of its messaging app with safe crypto transfers is Signal. Therefore, Signal has taken a slightly different approach to merging cryptos with messaging.

Signal wanted to make sure that the crypto transactions on its messenger app were even more secure than on the Bitcoin blockchain. Whereas Bitcoin’s blockchain is designed to keep a ledger of all transactions, Signal wants to make the transactions completely private.

This is ensured by several security features, such as the safety protocol CryptoNote and the Ring Confidential Transactions that hide the amounts that were payed. Even the method of proof, Bulletproof, is different from methods of proof in other blockchain networks. Bulletproof is a mathematical method that verifies the transactions without revealing their values.

Simply put: when you transfer cryptos on Signal, nobody outside of sender and recipient will know who send how many coins to whom.

In a beta test in the UK, Signal first introduced its technology in the spring of 2021. Here, users were able to transfer the privacy-focused token MobileCoin. In November 2021, Signal then quietly rolled out the feature for all users globally. According to MobileCoin founder Josh Goldbard, the daily transactions went up into the thousands versus a few dozens before the global release.

Status’ crypto messenger app

Recognizing the possibilities of an app that combines messaging capabilities with crypto transfers of Ethereum, the Swiss start-up Status recently launched a dedicated crypto messenger app. The project is supported by LimeChain, a blockchain consulting company.

By combining the effortlessness of messaging with the security of cryptos, Status wants to become a super app where users can pretty much do anything they need to do online on the messaging app.

The app wants to combine messaging services, a crypto wallet, and a Web3 browser all into one ecosystem.

What's the future of crypto messaging apps, and should you care?

As with any emerging technology, the question is: is this worth getting into, or is it just a hype? Currently, there is definitely a hype around cryptos. However, the fact that governments and financial institutions are looking into regulating it, is also a sign, that the technology might be here to stay.

Now, for example, the U.S. Internal Revenue Service (IRS) requires taxpayers to declare income in cryptocurrencies.

However, the still very unclear financial regulations around cryptocurrencies also explain why the roll-out of crypto messaging has been somewhat slow. A lot of companies are still waiting to see what regulators decide before getting into the crypto game.

Concerns

From a business perspective, there are also a few concerns around integrating cryptocurrencies into messaging. It could possibly attract criminals to the apps who use the anonymous payment method for money laundering or other criminal activities.

There are also data privacy concerns that, if these services are not well-designed, messaging services will be able to tell what people are spending money on.

Benefits

On the other hand, cryptocurrency transfers directly on a messaging app could take conversational marketing to the next level. Consumers would be able to talk to a company about a product, order it, and pay it all in one go. It would also amplify the usage of the messaging apps, as users could make private money transfers to friends and families.

Of course, this also depends on how well-designed the tools would be, and how willing users are to adapt cryptocurrencies. This will probably depend on the market, too.

In Germany, for example, users are very skeptical towards cryptocurrencies. Among people older than 16, only two percent have invested in them. In the UK, trust in cryptos is only minimally higher, with 4.4 percent of UK adults (2.3 million people) who own cryptocurrency.

Brazil, on the other hand, is the fifth largest crypto market with more than ten million people that have already invested in Bitcoin and other digital tokens.

So, it makes sense for businesses to wait and see how things will develop in their target markets. However, there is already a way for companies to test if the technology works for their target audience by combining conversational marketing and app-based shopping. Chances are, companies that position themselves early in the market, will be faster with the roll-out of crypto messaging, and could therefore soon be a step ahead of the competition.