Facebook's Cryptocurrency Could Bring the Firm $19 Billion, Barclays Analyst Claims

Facebook's Cryptocurrency Could Bring the Firm $19 Billion, Barclays Analyst Claims

Facebook's reported stablecoin project could be a significant moneymaker for the social media giant, according to Barclays analyst Ross Sandler. While the details of the "Facebook Coin" may be sketchy at the moment, the benefits that could accrue from the development is being deciphered.

Per Sandler, the possibility of Facebook adding a new revenue stream "starts to change the story" of the company's shares, in Barclays' view.

As CNBC points out, Facebook has tried to get into payments almost a decade ago, as it created a digital currency called "Facebook credits".

Ross Sandler, Barclays internet analyst seem to be betting on prospects of Facebook's crypto-project. To put that estimate in context, the Menlo Park, California, company brought in $40.6 billion in total revenue in 2017, with $39.9 billion from advertising. The coin is expected to launch in India across the platform's WhatsApp due to the fact that the app enjoys 200 million users in that country.

The tech company is working on a digital currency as per reports, that could work like a stablecoin.

Last year, the internet giants were hit with a series of high-profile data scandals starting with the notorious Cambridge Analytica incident. Sandler notes that this is "sorely needed at this stage of the company's narrative".

The analyst went on to note that the inclusion of a native payment method would allow for more premium content appearing on the site. The analyst wrote for nature of the digital coin, "Based on our checks, the first version of Facebook Coin may be a single objective coin for micro-payments and domestic p2p money transfer (in-country), very similar to the original credits from 2010 and Venmo today".

Nevertheless, Sandler also proposed that Facebook may decide to absorb interchange costs between its potential new cryptocurrency and fiat currencies. An addition to the revenue in the scale of billions could help Facebook regains its success in the stock exchange and possibly even outrun Apple stock. The profitability of this early scheme was questionable and it was ultimately shelved, however.

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According to Sandler, Facebook's original payment plan looked a lot like the cryptocurrency of today.

Sandler said that under David Marcus, former president of PayPal, who is now heading the Facebook's blockchain and cryptocurrency team, Facebook has been making huge strides.

How much do you think Facebook could earn with its own cryptocurrency?

Finally, Sandler speculated on the future. And if this endeavor is successful, Sandler predicts that the company would "eventually" branch into the realm of consumer lending, remittance, and physical payments.

Moreover, this project was supposedly meant to become a virtual currency for in-app-purchases, not entirely unlike a cryptocurrency.

Reportedly, the Mark Zuckerberg-led firm has yet to make any official announcement concerning its crypto ambition.

When Facebook launches a coin, many people will use these candy-colored financial surveillance systems.

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