Facebook is said to be pursuing investor support for its cryptocurrency-related project.
The tech giant is looking for venture capital firms to invest in its alleged stablecoin offering — with sums rumored to be as large as $1 billion — according to New York Times reporter Nathaniel Popper.
For over a year, Facebook’s cryptocurrency project has been mentioned in the media. The company, however, has kept it under wraps — without confirming or refuting any claims. What is known is that the company already has a whole division devoted to blockchain development, which is headed by David Marcus.
According to Popper, the word on the street is that Facebook is seeking to raise an initial amount close to $1 billion, which will allegedly be used to back the stablecoin. Moreover, the stablecoin will be pegged to a basket of foreign currencies, according to the reporter.
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
Facebook Looking for Decentralization?
As Facebook is one of the largest companies in the world — with cash on its balance sheet exceeding $10 billion — the request for funds may seem strange to an outsider.
The reason behind the pursuit of funding is that Facebook has recognized decentralization as one of the most desired characteristics of a digital currency, according to Popper’s source. By raising funds from different entities and enabling a stablecoin pegged to multiple foreign currencies, the move could hint at a semi-decentralized or, at least, distributed infrastructure for Facebook’s coin.
A federated chain is an example of such a structure, where several trustworthy entities validate and create transactions for the network.
Will Decentralization Save Facebook From Scrutiny?
The intent to decentralize its blockchain will not only gain some support from a portion of the cryptocurrency crowd but it can also help Facebook avoid some of the scrutinies it has been under for the past two years.
The social media platform has seen its methods regarding data sharing heavily criticized, with CEO Mark Zuckerberg having to testify in court in both the USA and the European Union. As such, a decentralized structure of the stablecoin will keep the company away from being a target for authorities as a controlling party.
While these remain rumors until officially confirmed, it does seem that Facebook wants to utilize blockchain technology to enable its users to seamlessly transact on the company’s platforms. Considering Facebook’s track record in building products, it won’t be a surprise if its stablecoin will see wide adoption across the globe.
What do you think? Is Facebook trying to decentralize its stablecoin or is it just a traditional fundraising round? Let us know in the comments below!
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