New York Times technology reporter Nathaniel Popper claims that the social media behemoth has contacted venture capitals in search of additional funding.
Rumor has it Facebook has long been flirting with the idea of launching its own cryptocurrency. Now New York Times technology reporter Nathaniel Popper claims that the social media behemoth has contacted venture capitals in search of additional funding. The company is looking for $1 billion to fund its stablecoin project.
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’s not that Facebook itself doesn’t have the money but a stablecoin project development would require as much as $1 billion. The tech giant has been so far reluctant to jump into the crypto ocean. Not only that but it also banned advertisements promoting cryptocurrency projects from running on its platform. Nevertheless, last fall Facebook hinted that it is on its way to build a digital asset stripped from any volatility. In other words, while Facebook might not be into cryptocurrencies, it seems to keep an eye on the stablecoin market.
Perhaps, Facebook’s reluctance to buy the crypto hype has something to do with the great amount of fake accounts promoting various (a lot of them fake) cryptocurrency projects. Twitter particularly is plagued with bots and scammers, who often tend to impersonate celebrities in an effort to endorse their scammy tokens.
On the other hand, DogeCoin and ReddCoin have been very popular among social media users. These two, along with Ripple’s XRP have been mostly used to tip content creators and social media contributors. Other projects such as Verge have also gotten traction in recent months.
Despite that, traditional businesses are not really into digital assets. One particular reason for that is the volatile nature of cryptocurrencies. This is where stablecoins step in. They offer all of the benefits that come with digital assets but act predictably because they are pegged to a fiat currency, usually the US dollar.
For instance, Tether is the most popular stablecoin tied to the US dollar. While there are many others, it remains the most traded one. It has its own fair share of troubles, however. There are speculations that Tether lacks the equivalent sum in cash to back its 2 billion tokens in circulation.
Facebook has not revealed any details regarding its cryptocurrency doings so far.