Social media Goliath Facebook is on a quest to raise $1 billion externally for its ongoing crypto project.
New York Times technology reporter Nathaniel Popper expressed on Twitter how the company were aiming to raise an amount in the $1 billion ballpark from venture capitalists to back the stablecoin project. Allegedly, a primary purpose of the funding would be as collateral to back the token. However, until further notice, these thoughts will be treated as speculation until Facebook make an official statement to confirm.
Update on Facebook's cryptocurrency: Sources tell me that Facebook is now looking to get VC firms to invest in the Facebook cryptocurrency project we reported on earlier this year. I hear they are targeting big sums — as much as $1b.
— Nathaniel Popper (@nathanielpopper) April 8, 2019
It was revealed back in December, that the social media giant has been working on a stablecoin that will be functional for money transfers on WhatsApp. According to Popper, it is presumed that the coin will be backed against a collection of foreign currencies, held in bank accounts.
As expressed in February, this is alongside Facebook’s plan to list its stablecoin on crypto exchanges which it anticipates to launch in the first half of 2019.
Given Facebook’s financial capabilities (an estimated $44 billion in cash reserves as of April 2018 by CNBC sources), its request for financial backing seems mysterious. However, knowing how cunning Zuckerberg can be, the external investment could prove to be a great strategic move for Facebook. The move could merely be a ploy to present the project as decentralised, an issue that currently clouds the project with significant concern. Such concerns arise due to their well-publicised unethical practices surrounding privacy amongst other things and the monopolistic tendencies of its founder.
Not long ago it was mentioned by Ross Sandler, respected Barclays Analyst, that Facebook’s crypto project could fetch it an additional $3-$19 Billion in revenue by 2021.
With its secretive blockchain mission which saw a designated team established in May 2018 Facebook have been aggressively pursuing the expansion of this department by scouting for the best talent globally; with its most recent bout being an advert promoting 20 open vacancies for blockchain related roles.
With limited official information from the social media giant, we will have to wait expectantly for the release of this much-awaited project.
Mark Zuckerberg licensed via Shutterstock