It is no secret that Facebook is reportedly developing its own cryptocurrency. While the details of the ‘Facebook Coin’ may be sketchy at the moment, the benefits that could accrue from the development is being deciphered.
Ross Sandler, an internet analyst from Barclays claims that is Facebook launches its proposed cryptocurrency, could take the company’s revenues north to the tune of $19 billion by 2021. Sandler disclosed this in a forecast shared with financial news network CNBC.
According to its report, Sandler and the Barclays team forecast that Facebook will gain at least $3 billion annually from this year till 2021 if the Facebook coin is launched. This will no doubt boost Facebook stock which has faltered for last year following its data scandal cases. “Merely establishing this revenue stream starts to change the story for Facebook shares in our view,” he said.
As reported by Smartereum, there were indications since last December that Facebook is developing a stablecoin pegged to the U.S. dollar. The stablecoin is expected to drive its payment ecosystem for messaging app WhatsApp in particular. Observers believe that the cryptocurrency will become the payment method across all Facebook-owned platforms as the internet giants plan to integrate Facebook, WhatsApp, and Instagram.
Facecoin to Fix Privacy Issues At Facebook?
Last year, the internet giants were hit with a series of high-profile data scandals starting with the notorious Cambridge Analytica incident. The incidents put Facebook in a bad light prompting the management to intensify efforts to protect the privacy of its users and rid the platform of abusive content.
Decentralization, something founder Mark Zuckerberg talked about last year, could help Facebook in its quest. Not only will decentralization restore some of its reputation, but a crypto-based revenue stream would also boost its finances. Sandler notes that this is “sorely needed at this stage of the company’s narrative.”
“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”
Is FaceCoin related to Bitcoin?
The cryptocurrency community has also imagined what a Facecoin will mean for current cryptocurrencies and the total market cap of cryptocurrencies. One would imagine a massive coin flipping. With over 2.5 billion users, the Facebook ecosystem could take Facecoin straight to the top of the coin market cap leaderboard flipping major cryptocurrencies like Bitcoin (BTC), Ethereum (ETH) and ripple (XRP).
According to Sandler, Facebook’s original payment plan looked a lot like the cryptocurrency of today. Back in 2010, Facebook proposed a “Facebook Credits” which is basically a virtual currency that allowed to make in-app purchases using tokens bought with local currencies. He and the team at Barclays predict that the stablecoin that will be launched by Facebook will have the markings of the original Facebook credits which has only one purpose.
“Based on our checks, the first version of Facebook Coin may be a single purpose coin for micro-payments and domestic p2p money transfer (in-country), very similar to the original credits from 2010 and Venmo today,” he explained.
The Magnitude of Facebook’s Blockchain and Cryptocurrency Project
Observers have complained that Facebook is hesitating so much in its blockchain ambitions. This could be due to the scope of its plans, Sadler suggested. He noted that Facebook is determined following its appointment of Former PayPal exec. and Coinbase director David Marcus to lead the team. Facebook recently acquired the staff of blockchain startup Chainspace.
As reported, Zuckerberg is considering blockchain logins for Facebook log in. The system could involve a master facebook login with which users can grant third-party apps access to their private data.