As the Bitcoin bear ran its course over 2018 and early-2019, Facebook began to quietly bolster its efforts in the blockchain and crypto space. By now, the firm has amassed a purported 50+ full-time staff, including David Marcus of the PayPal Mafia, key Instagram executives, and top blockchain talents from across the globe, some of which have reportedly been poached from industry startups.
However, the social media giant’s quiet yet serious foray into this newfangled industry has seemingly been stalling, as rumors indicate that the venture needs financing — a lot of it. But that’s where Bitcoin bull Tim Draper comes in.
Facebook Blockchain Seeks Funding For Crypto Asset
In a recent email to Bloomberg News, Tim Draper, a Silicon Valley-based venture capitalist with a heavy bias towards Bitcoin and similar technologies, revealed that he is looking to convene with Facebook’s blockchain team.
Draper, who rose to crypto fame after he purchased $18 million worth of Bitcoin at a U.S. Marshalls auction, explained that he will “see if it is a fit” for his portfolio. The prominent cryptocurrency pundit was hesitant to admit the sum that he would invest, if at all, but considering lofty stash of digital assets, it likely isn’t small.
For those who missed the memo entirely, rumor has it that Facebook’s mainly Palo Alto-based blockchain team is looking to launch a stablecoin, a cryptocurrency tied to the value of an asset outside of this ecosystem, for WhatsApp users. Sources speaking to Bloomberg explained that the digital asset, centered around use in India as a mode of payment, would be pegged to the U.S. dollar and potentially other “stable” assets. And interestingly, this is more than just a concept.
Per previous reports from Blockonomi, The New York Times recently revealed that Facebook’s coin could be released as soon as the “first half of the year.” They cited insiders who stated that Facebook has entered discussions with crypto exchanges, which remained unnamed, in a bid to find listing partners. Although it isn’t clear whether these platforms bit or not, this then confirmed that the company’s first consumer-facing cryptocurrency project was on the cusp of launching. But this might not be the case.
As hinted at earlier, Facebook’s little-known blockchain division is looking for funding for this project. Nathaniel Popper, The Times’ resident cryptocurrency and blockchain reporter, recently took to Twitter to say that the company is actively seeking out venture capital firms for big sums — “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
It isn’t clear why Facebook, one of the most valuable firms on planet Earth, itself isn’t footing the bill for this project. Some speculate, however, that this indicates that the who’s who at the technology firm, maybe even Zuckerberg himself, aren’t too sold on the idea. But maybe they should be.
“FacebookCoin” (FBCoin) Likely To Be A Net Benefit
Barclays’ analyst, Ross Sandler, explained that Facebook may stand to gain $19 billion in revenue by 2021, just as a result of the launch of FBCoin. Even if the worst comes to worst, the may ‘only’ net $3 billion revenues from the digital asset. Sandler even adds that this digital asset could be a saving grace for the company, especially if the #deletefacebook movement and digital revolutions of a similar caliber continue to garner traction.
In other words, FBCoin could be integral in Facebook’s need to diversify its revenue streams and business models, as the Cambridge Analytica debacle continues to haunt the platform.
If Facebook has the chance to experience dramatic financial upside and to please shareholders, why isn’t it funding this project?
Again, no one is all too sure. But all this will come to light in the coming months and years, as one of the largest companies in the world finally embraces cryptocurrencies by launching its own.