Line said to explore cryptocurrencies for payment services
Line Corp. is working to integrate cryptocurrencies into its messaging platform as the Tokyo-based company seeks to differentiate its products and services, according to people with knowledge of the matter.
The messaging provider is in discussions with multiple companies on using cryptocurrencies for payment services including Line Pay, said the people, asking not to be identified because the information isn’t public. The broader goal is to create products that keep users within Line’s ecosystem and keep them coming back to the app, increasing "stickiness," they said.
Line shares earlier surged 10 percent on Tuesday to a record in Tokyo on speculation that it was looking to tie up with South Korean bitcoin exchange Upbit. A representative for Line declined to comment on a potential alliance with Upbit. Shares slid 1.9 percent Wednesday.
Line, with a market value of 1.2 trillion yen ($10.6 billion), joins a growing list of businesses looking to capitalize on both the technology and the hype surrounding bitcoin and other cryptocurrencies. By integrating digital money services deeper with its app, the company is seeking to fend off challenges from larger rivals like Facebook Inc. and Snap Inc.
Line, known for its cute and expressive stickers that people share with each other, has been shifting its business toward advertising in recent years, beating analyst profit estimates in the latest quarter. The company has 168 million monthly active users in its main markets of Japan, Taiwan, Thailand and Indonesia. Besides messaging, it offers services ranging from food delivery to job searches and online video streaming.
Mark Zuckerberg, Facebook’s chief executive officer, said this week that cryptocurrencies and blockchain technology could potentially be used on Facebook’s platform. Last year, Waterloo, Ontario-based messaging app Kik Interactive Inc. raised $100 million through an initial coin offering and pledged to use the proceeds to create blockchain-based services on its platforms.
Businesses ranging from Long Island Iced Tea Corp. (now Long Blockchain Corp.) to Seagate Technology Plc have seen shares surge this year and last after announcing blockchain or cryptocurrency-related businesses, despite offering scant details in some cases. Some investors have criticized the market’s reaction, blaming a broader crypto bubble for funneling excess into the stock market.