Messaging app Telegram is planning to launch its Gram tokens on October 31. According to a New York Times report, the app also plans to make digital wallets available for 200 million (out of a total of 300 million) users on its platform. Telegram envisages Gram tokens as a payment mechanism for user transactions on the Telegram Open Network (TON) – a blockchain-based payment system. in its whitepaper, the app referred to it as a replacement for MasterCard/Visa for transactions.
The Times report states that Gram will be a decentralized cryptocurrency that will function in a manner similar to Bitcoin. The lack of central control will make it easier for the coin to evade government oversight, just as BTC has managed to do thus far. Telegram also said that it would have no control over the coins once they are released.
The company has committed to delivering the Grams by October 31, else it will refund investors. Some Gram holders will be able to sell their holding on exchanges immediately. However, early investors in the token have agreed to a waiting period.
News of the release of Gram on Telegram’s platform caps a controversial fundraising process for the tokens. The London-based company was scheduled to raise funds from the public in a widely-anticipated initial coin offering (ICO) last year. But it cancelled the offering after raising $1.7 billion from private investors. In June, South Korea-based Gram Asia, the largest holder of Gram tokens, offered them to users on the Liquid cryptocurrency exchange. One observer described the move as “effectively syndicating Gram holdings onto Liquid exchange clients.”
Comparisons with Facebook Libra
The New York Times article compares Telegram’s tokens with Facebook’s Libra venture. This is not surprising considering Pavel Durov is often referred to as Russia’s Mark Zuckerberg. But there are a couple of differences between the tokens for both social networks. The scale of Facebook’s operations means that the scope and reach of Libra is much bigger.
Facebook has also committed to opening up its blockchain to public contributions in five years and has been on a publicity tour to build consensus and educate regulators about it. Telegram’s project has been shrouded in secrecy. Critics were skeptical of the project even during the app’s fundraise for the project, charging that the introduction of a token in its network was not an innovative approach.
That said, Telegram’s Gram tokens could face regulatory hurdles similar to those for Facebook’s Libra. For one, not much detail is available on uses for Gram tokens. Given the lack of regulatory clarity around tokens, Gram could encounter a hostile reception from regulators. Encryption on the platform could become a double-edged sword enabling criminal elements to thrive and use its token for nefarious purposes, thereby heightening regulatory scrutiny.