Facebook is looking to raise as much as $1 billion of outside funding for its cryptocurrency project, New York Times’ Nathaniel Popper says. Earlier reports suggested that Facebook may look for outside investors, however, the reported figure of $1 billion is bigger than it was previously anticipated.
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) 8 апреля 2019 г.
It is important to note that, as one of the world’s largest companies, Facebook reportedly had more than $44 billion in cash in 2018. The current market cap of the tech giant is more than $500 billion. As such, the company is not necessarily craving for outside funding.
However, as Popper notes in a series of tweets, Facebook is looking to give back some of the control over the new project as the new stablecoin is, of course, based on the blockchain technology.
“One person I spoke with said that Facebook is talking about using the money as collateral for its cryptocurrency. Facebook has been designing the coin to keep a stable value, pegged to a basket of foreign currencies held in bank accounts,” adds Popper.
Thus, Facebook may opt to raise money and keep it in the bank while it invests its own money in the project.
Facebook’s intentions – that the tech giant is working on rolling out a cryptocurrency to enable users to transfer money on its WhatsApp messaging app – were first reported by Bloomberg in December. Two months later, the New York Times added that Facebook, Telegram and Signal are working on similar projects, which should be finalized by end of the year. The original plan is to allow instantaneous sending of coins to contacts on the platform.
“It’s pretty much the most fascinating thing happening in crypto right now. They each [Facebook, Telegram and Signal] have their own advantage in this battle, and it will be insane to watch it go down,” said Eric Meltzer, the co-founder of venture capital firm Primitive Ventures.
A couple of weeks ago, a British giant bank Barclays, estimated that Facebook can profit as much as $19 billion in revenues by 2021.