Facebook, which is a well-known social media giant, seeks to raise as large as a billion dollars in outside funding which are meant for its crypto project.
Facebook prepared to invest in its crypto project for sums more significant than $1 billion
Social media platform Facebook looks for venture capitalists or VC companies in order to invest in its crypto project for sums as much as $1 billion, according to one report from The New York Times. As it was said, the firm designs its cryptocurrency as a stablecoin for WhatsApp, with the use of the basket of foreign currencies as collateral to back the token.
It has to be noted that, at this stage, the comments weren’t confirmed by Facebook or by any potential investors.
Since last December, Facebook was working hard on the crypto project and building a blockchain division inside of the firm. Facebook was developing its stablecoin for transfers of money over WhatsApp. It could have been pegged to a basket of foreign currencies which are held in bank accounts.
The social media platform has not said much about this crypto project, but they hired almost 30 people to the division with the former Messenger’s head and the former PayPal’s president, named David Marcus, being put at the place of the Director of Engineering Blockchain.
Facebook is not tight when talking about finances
Facebook also has some plans to list the stablecoin on crypto exchanges, telling other platforms during February that it expects to actually get the product out during the first half of this year.
A reporter of the New York Times, Nataniel Popper, posted several tweets on the 8th of April, with information collected from sources on the blockchain or crypto project of Facebook.
Nataniel tweeted that according to some sources, Facebook is now looking to get VC firms to invest in its Facebook crypto project and that it targets significant sums, more than $1 billion.
Based on the financial statements of Facebook, the company has $10 billion in cash, as well as cash equivalents only so we can say that they are not tight when talking about finances.
The stablecoin will be backed by a collection of foreign currencies
While Facebook isn’t short of cash, including outside investors in its project could actually help the platform in presenting its crypto project as more decentralized, and also less controlled by itself, according to Popper. During April of last year, Facebook had $44 billion in cash and equivalents.
One source revealed to Popper that the company raises funds to collateralize a stablecoin. Unlike some others, the coin of the social media giant would be backed by a collection of foreign currencies. This means that it would be more resilient to volatility, even against some currency exchange rates. Such stablecoin could have an enormous effect on the industries’ needs.
Earlier in this year, Ross Sandler, who is an analyst from Barcplays, estimated that the crypto project of Facebook could yield from $3 billion to $19 billion in the additional revenue by the year 2021.
The blockchain team of Facebook was set in May of last year, and it has the purpose to explore the emerging technology. Since that time, the company was looking forward to expanding its team with new hires. In recent times, it had more than 20 open positions related to blockchain roles, which include a leading commercial counsel too.
Earlier in 2019, Facebook hired staffers from Chainspace, the startup which stands behind a smart contracts platform.