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Signal is getting a crypto-based payments system

Signal
(Image credit: Signal)

Privacy-centric messaging platform Signal has announced it will roll out a new payments system, allowing users to send and receive funds without compromising their anonymity.

The new system is based on a little-known cryptocurrency called MobileCoin, characterized by its rapid transaction speeds and ease of use on mobile platforms. The digital currency shares a number of traits with popular privacy coins Monero and Zcash, which specialize in totally anonymous and untraceable transactions.

During the initial trial, payments functionality will be available to UK users only, and exclusively on mobile devices. According to Signal, this is partly due to the fact MobileCoin is not currently listed on any US-based crypto exchanges, but the company hopes it will be able to bring payments to a wider audience soon.

Signal payments

Signal is coming off the back of a bumper year for growth, catalyzed by a controversial update to the WhatsApp privacy policy that drove millions of users to seek out an alternative service.

In a bid to capitalize on this momentum, Signal has been hard at work building out the range of available features. Recent additions include multi-device calling, end-to-end encrypted video conferencing and, now, cryptocurrency payments.

What sets Signal’s new payments system apart is that users will not be required to link a bank account in order to send or receive money. The blockchain underpinning MobileCoin cryptocurrency is also architected in such a way as to protect the identity of the sender and recipient, as well as obscure the value of transactions.

“There’s a palpable difference in the feeling of what it’s like to communicate over Signal, knowing you’re not being watched or listened to, versus other communications platforms,” said Moxie Marlinspike, Signal CEO.

“I would like to get to a world where not only can you feel that when you talk to your therapist over Signal, but also when you pay your therapist for the session over Signal.”

However, Signal will need to resolve a number of outstanding questions before its new payments system can be adopted en masse. 

The most obvious is the limited availability of the MobileCoin cryptocurrency, which is currently listed on only one exchange, FTX. And unlike some older cryptocurrencies, MobileCoin is not widely supported by retailers, meaning users will have to switch back out to fiat currency in order to purchase goods and services.

Even more difficult to resolve is the issue of volatility, which afflicts almost all major cryptocurrencies. Within the last ten days, for example, the value of a single unit of MobileCoin has swung from circa $7 to more than $60. This level of instability exposes users to significant theoretical losses, in the event the price skyrockets in the immediate aftermath of a purchase.

Marlinspike acknowledges these challenges, however, and remains bullish about his company’s ability to find viable workarounds. Front of mind, he says, is the opportunity to push back on financial surveillance practices and give people a simple and totally private way to send and receive money.

Via Wired

Joel Khalili

Joel Khalili is a Staff Writer working across both TechRadar Pro and ITProPortal. He's interested in receiving pitches around cybersecurity, data privacy, cloud, storage, internet infrastructure, mobile, 5G and blockchain.