Facebook Coin could create new multibillion-dollar revenue option for US tech giant

According to Barclays analyst Ross Sandler Facebook’s reported cryptocurrency could bring a significant boost to the social media giant’s financial results, CNBC has reported.

Media reports from late 2018 have suggested that Facebook is developing a proprietary cryptocurrency – a stablecoin, reportedly designed to focus on the small payments in India. The reports have also said that the coin will be available through Facebook’s WhatsApp messaging application.

According to Sandler, if successful, the project could present a multibillion-dollar revenue opportunity for Facebook. The analyst predicts that the company could make as much as $19 billion in additional revenue by 2021 if the “Facebook Coin” is successfully implemented. His most conservative estimate is for a $3-billion revenue increase from the coin.

“Merely establishing this revenue stream starts to change the story for Facebook shares in our view,” Sandler wrote in a note to clients, as quoted by CNBC.

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. Facebook’s robust financial performance has been able to prop up the company’s stocks in the following months, but this only goes to show how important is for the firm to maintain its financial growth. Sandler says that tapping into payments with some form of cryptocurrency could generate a new revenue option for Facebook – something that 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,” the analyst added.

Sandler’s estimates are based on expectations that the Facebook Coin could mirror the success of Google’s digital distribution service, Google Play, which currently generates $6 in “net” revenue per user. The analyst sees the Facebook Coin having a similar revenue generating potential in 2021.