Japanese messaging app Line is launching its own cryptocurrency in a bid to attract and retain more active users, as spotted by TechCrunch. The token is called Link, and the company is avoiding an initial coin offering (ICO) and is instead giving the token away for free to users when they complete certain activities.
Line said the tokens can be used to buy stickers, webtoons, and other services on the app. Link will be listed on Line’s own cryptocurrency exchange, Bitbox, which launched back in June. It’s releasing 800 million tokens to users as part of a rewards system, which Line hopes will incentivize users to participate more on the app, while keeping 200 million in reserve.
Line has notably run into trouble in its home base of Japan where it awaits approval from authorities for both its cryptocurrency exchange and its own digital currency. (Bitbox is not available in the US or Japan.) While Link launches elsewhere in the world, users in Japan will get virtual points in the app for now that can be traded in for cryptocurrency later.
ICOs have come under increasing regulatory scrutiny from the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) over the past year. Many companies are attempting to avoid any association with scams and build customer enthusiasm by giving away digital coins through “airdrops” or by launching asset-backed tokens with something concrete tied to the name.
In the past year, the number of active users in four of Line’s largest markets has fallen. Its big rivals include WhatsApp, WeChat, and Facebook Messenger.
Betting on cryptocurrency to turn the tide for an aging product, by mixing hype with nostalgia, might have worked for some companies last year and early this year at the height of coin mania. But after a drop in the prices of digital coins and a number of ICO-related SEC probes, Line’s timing is rather off.