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Cryptocurrency

Rumors raise $1 bln for Facebook decentralized stablecoin

Maya Mandz | Apr. 10, 2019
Rumors raise $1 bln for Facebook decentralized stablecoin

April 10, 2019, | AtoZ Markets - Nathaniel Popper, the author of the popular Bitcoin book, recently shared on his Twitter account that, according to his sources, Facebook intends to find an amount close to $ 1 billion to finance Facebook decentralized stablecoin. However, neither Facebook nor any well-known venture capitalists confirmed the news from Popper.

The new coin will be exchanged on WhatsApp

The news from Nathaniel Popper comes just a month after Atoz Markets reported that the social media giant is developing a cryptocurrency that will be pegged against the United States dollar and is intended to be exchanged on Facebook-owned WhatsApp, focused mainly on the Indian market.

Many observers found it possible that the Facebook decentralized stablecoin would also be integrated not only into the WhatsApp messenger but also into the instant messenger and Instagram, which also belong to the social media giant.

The Facebook stablecoin might hit the market soon

As reported, Facebook decided to launch a coin to overcome the issue of volatility in the cryptocurrency world. The exact date of the release of the Fb coin was not revealed.

Later Barclays Bank analyst predicted that the rumored Facebook coin would generate up to $19 billion in revenue for the firm by 2021.

Popper also noted that Facebook decentralized stablecoin can be backed up by more than one foreign currency stored in bank accounts - just like all other stable coins, including USDT, USD Coin, TUSD. According to the popular Bitcoin book author, Mark Zuckerberg also intends to make Facebook decentralized stablecoin traded on crypto-exchanges, promising that it will be available during the first two quarters of 2019.

Facebook has enough cash to support its crypto future

According to the latest Facebook financial reports, during the first quarter of 2018, the company’s cash and cash equivalents rose to $ 44 billion. This is more than twice the amount that the company held only two years ago when its cash reserves were $ 20.6 billion. The company's operating margin jumped to 46 percent from 41 percent in the same period in 2017. The Bitcoin book bestseller author Nathaniel Popper revealed in his Twitter the possible amount of funds the social media giant plans to raise to support its stablecoin project. 

Popper suggested, that, although Facebook has enough funds it wants to attract foreign investors to make its stablecoin look more decentralized and less controlled by Facebook itself.

Popper also noted in his tweets that, Facebook might want to make new coin more attractive to users, especially in light of the recent scandals involving social media magnate and personal data of users.

Popper concluded the thread by saying, “It’s interesting to think one of the richest companies on earth is raising money.”

Is Facebook coin a real threat to Forex?

According to the media reports, the latest public sum Facebook collected reached $ 1.5 billion and came from firms including Goldman Sachs Investment Partners and DST Global. In addition, only in 2018, the company received revenue of 56 billion dollars, and net income - 22 billion dollars.

These numbers represent more cash than the market capitalization of each cryptocurrency, except bitcoins. For reference: Facebook’s market capitalization more than doubles the market capitalization of all cryptocurrency projects, reaching $ 500 billion.

As was mentioned earlier, Facebook decentralized stablecoin will be backed by a number of foreign currencies, which will make it even more resistant to volatility, even in relation to exchange rates. Facebook decentralized stablecoin can seriously undermine the need for certain industries like, for example, Forex.

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Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.