Economy

‘Facebook Coin’ Might Bring $19 Billion in Revenue, Barclays Predicts

‘Facebook Coin’ Might Bring $19 Billion in Revenue, Barclays Predicts

According to CNBC, Mr Sandler described the Facebook Coin as something that was "sorely needed at this stage of the company's narrative, " as it would enable the tech giant to develop a lucrative new revenue stream that isn't at the expense of its community's privacy.

The analysis was made by Ross Sandler, an internet analyst that works for Barclays.

Although the Facebook share price has reportedly rallied by about 30 percent in 2019, Sandler firmly believes that the creation of Facebook Coin is a forward-thinking maneuver by the firm, as it provides the company with a stable revenue option entirely different from advertising.

It is no secret that Facebook is reportedly developing its own cryptocurrency. Important sources like Bloomberg and the The New York Times have reported on this story so far, so it seems like a credible rumor.

By "2018's problems", Sandler is referring to the slump in crypto-prices. Adding a crypto asset into the mix could help Facebook's revenue production, which Sandler said the company needs at this point.

Facebook's stock took some significant hits last summer, in the wake of some high-profile blunders, such as the revelation that British political consulting firm Cambridge Analytica had collected data on more than 50 million Facebook users without their permission. This is why decentralized companies are better, folks. This will no doubt boost Facebook stock which has faltered for past year following its data scandal cases.

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"Any attempt to build out revenue streams outside of advertising, especially those that don't abuse user privacy are likely to be well-received by Facebook's shareholders", Barclays' note stated.

Sandler's estimates are based on expectations that the Facebook Coin could mirror the success of Google's digital distribution service, Google Play, which now generates $6 in "net" revenue per user. Presently, Google Play generates $6 in "net" revenue per user. There are now more users of both the social media platform and virtual currencies.

The mentioned "credits from 2010" is also an interesting part of the company's history. With this credit, they could seamlessly make transactions on Facebook. Each virtual credit cost around 10 cents back then.

According to Sandler, Facebook's original payment plan looked a lot like the cryptocurrency of today. With companies like Instagram and Whatsapp on its portfolio and a world that has come to accept the blockchain technology, it is easy to see a bright new future for Facebook.

However, do not get too hopeful too soon. Moreover, to avoid the wild price swings, Facebook will reportedly peg its crypto against USA dollar, creating a so-called "stablecoin".

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. David Marcus was a former PayPal president and you know how successful Paypal is.