Business

Steve Kaaru

Facebook seeks $1 billion investment from VCs for its crypto

Facebook is reportedly seeking $1 billion from venture capital firms for its crypto project. Nathaniel Popper, a technology reporter for the New York Times revealed the information in a series of tweets. Popper, who is also the author of ‘Digital Gold: A History of Bitcoin’ cited sources with insider knowledge on the issue.

According to the sources, Facebook has two reasons to shop for the funding. The first is to decentralize the project. With the social media giant having been solely involved in the development of the anticipated crypto, questions have arisen on just how decentralized the crypto will be. By attracting funding, the company allegedly hopes that it will portray the image of a decentralized project. Popper wrote:

“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.”

The second reason the Menlo Park firm is seeking the funding is for use as collateral. As we have previously reported, the Facebook coin will be a stablecoin. Facebook reportedly wants to use the funds to peg the crypto. Citing the sources, Popper revealed that the firm would peg the crypto to “a basket of foreign currencies held in bank accounts.”

Announced in December last year, Facebook’s crypto has been one of the more anticipated projects in the crypto industry. Nonetheless, it has divided the community, with those opposed to it saying that it won’t be decentralized as much as Bitcoin SV (BSV), Ethereum and other cryptos. Facebook will be in firm control of the crypto, just like JPMorgan Chase will be in total control of its JPM Coin.

One of those who have been vocal about why JPMorgan and Facebook’s cryptos are inferior is Phil Chen, the blockchain lead at Taiwanese phone maker HTC. Chen has been the lead developer in HTC’s Exodus blockchain-powered phone. In a recent interview, he said:

“I liken it (Facebook Coin and JPM Coin) to intranets. So companies used to have an intranet, which means a surveyed, permissioned, secure internet. That’s how I see these coins. When you issue a private coin, it’s the intranet compared to the internet.”

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