Facecoin on the way? Facebook Getting Ready for Social Crypto Battle by Reportedly Raising $1 Billion
- By Pierre-Alexandre
April 9th, 2019
The battle for the next social cryptocurrency seems to be heating up, with social media giant Facebook reportedly looking to raise $1 billion from venture capitals (VCs) for its cryptocurrency project.
Facebook aims to raise $1 billion for its crypto project
According to Nathaniel Popper, a technology reporter at The New York Times, Facebook is reaching out to VCs to invest in their digital currency project this year. He stated that sources close to the matter revealed to him that Facebook is aiming to raise a massive amount from venture capitals, as much as $1 billion.
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 has been developing a stablecoin that would be used on its messaging platform, WhatsApp. The company launched its blockchain unit last year, with David Marcus tasked with leading the new division and fully exploring blockchain tech and cryptocurrencies and how Facebook can take advantage of the emerging market.
Some people would cast doubt behind this latest development as Facebook’s financial statement shows that the company has roughly $10 billion in cash alone. However, Popper claims that Facebook wants to appeal to investors and the decentralization feature of blockchain would draw them and convince them that the company has lesser control over the cryptocurrency.
He added that Facebook has been designing the coin to keep a stable value, “pegged to a basket of foreign currencies held in bank accounts”. By pegging the stablecoin against numerous fiat currencies, Facebook would be offering something different as most stablecoins are usually pegged to a single currency.
Popper admitted that it is surprising that Facebook is raising funds from outside investors, as it has been a long time since the company did something like that.
A FacebookCoin stablecoin isn't just extra stupid, it's possibly the worst, most obviously evil idea from Mark Zuckerberg - and that's saying **a lot**— Eloncarlo"USDT33kByJuly" (@CasPiancey) April 9, 2019
Other social media platforms getting into crypto
Facebook is not the only social media company venturing into the crypto space. Vkontakte (VK), a social media giant in Russia launched its cryptocurrency called VK Coin earlier this month. The digital currency will be integrated into VK’s payment system known as VK Pay. The VK Coin can be mined by users of the platform using a mobile app game. The VK Coins can be sent to others or accumulated, the post added.
Japanese social media giant LINE unveiled its cryptocurrency called LINK in August last year. The cryptocurrency comes with its complete blockchain and makes use of the Delegated Proof-of-Stake (DPoS) consensus algorithm to carry out fast transactions on the network. Another social media company, South Korea’s Kakao has also been involved in the crypto space over the past few years, even going as far as integrating crypto wallet for 44 million users.
The developments made by social media companies towards cryptocurrency could signal the beginning of a battle between them. Each one will try to dominate and innovate in this new layer of the cryptocurrency ecosystem, this also against current payment leaders such as Visa or Paypal.
A much more interesting analysis would be about how FaceCoin will be a serious blow to Paypal, VISA, Chase and other banking industry players. Facecoin doesn't compete against crypto - it DOES compete and very strongly against the banking incumbents.— Andreas M. Antonopoulos (@aantonop) March 7, 2019