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Facebook Reportedly Seeking for $1 Billion in Venture Capital for Its Cryptocurrency

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by Julia Sakovich · 3 min read
Facebook Reportedly Seeking for $1 Billion in Venture Capital for Its Cryptocurrency
Photo: Pixabay

Facebook is said to be seeking support from external investors to raise $1 billion to develop its cryptocurrency project.

Last year, though the company didn’t want this information to be publicly known, it was revealed that Facebook started to work on a cryptocurrency project and was forming an internal blockchain division.

Facebook still hasn’t disclosed any precise information on the progress of this project and is trying to keep it in a secret. Nevertheless, at least 30 specialists have already joined this new division.

David Marcus who previously served as the head of Messenger and the president of PayPal has been appointed to be the Director of Engineering, Blockchain and is now the head of this newly-formed division at Facebook.

Investment Needed

Now some more details about this covert project have become known. New York Times (NYT) tech reporter Nathaniel Popper has shared some interesting information on his Twitter account.

As Popper has revealed in his tweet, Facebook is seeking support from various venture capital firms to raise funds that would be reportedly allocated for the development of its supposed digital token.

According to the sources familiar with the matter, Facebook wants to get a $1 billion amount to use it for the needs of its new crypto. If this information is true, it will become the first time in its history when Facebook will be trying to raise funds from external investors. It is one of the most prominent and successful businesses in the world and it used to fund all its projects on its own.

Nevertheless, the desire to receive outside investments has its explanation. It is explained by the necessity to build the project in accordance with the main principles of decentralization.

He explained:

“Given that one of the big allures of blockchain projects is the decentralization, getting outside investors could help Facebook present the project as more decentralized and less controlled by Facebook.”

It means that the more external institutions would be involved, the less accusation of building a fully centralized project Facebook could receive. Nevertheless, some expert highlight that the involvement of multiple investors doesn’t necessarily make the project absolutely decentralized. Moreover, due to the participation of some bodies and organizations, a project may become subject to strict to regulations being considered to be a security.

What We Know about Facebook Coin

Recently it has been revealed that Facebook’s coin may be probably a stablecoin that will be backed by a basket of different cryptos.

When last December there appeared the first rumors of this crypto project, it was reported that the coin would be utilized to facilitate transfers made within the WhatsApp messenger service.

Nevertheless, later, in February it was said that the coin may be used throughout the whole Facebook eco-system, including WhatsApp, MessengerApp as well as Instagram. It means that nearly 2.7 billion users each month will have access to it.

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