Facebook’s native cryptocurrency, if launched, may probably produce $19 billion in extra revenue by 2021, CNBC reports on March 11.
Ross Sandler, Barclays internet analyst wrote in a client note that virtual currency could set up a new revenue stream for Facebook, that may aid its share price that plunged amid a series of high-profile scandals last year.
Sandler, in the prediction, pointed out that the cryptocurrency-based revenue option is something quite needed at this stage of the company’s narrative. He further stressed that any advertising-free revenue streams are expected to be well-perceived by shareholders of Facebook. Sandler mentioned that his more conservative revenue estimate for the new cryptocurrency is $3 billion.
The Barclays analyst recalled Facebook’s original payment project that was analogous to what cryptocurrencies are today. Notably, Facebook Credits was developed by California-based firm, The Menlo Park in 2010. Interestingly, “Facebook credits” represented a virtual currency that allowed users to pre-pay those credits by means of domestic currencies and then use them for in-app purchases.
He further added that Facebook will bear the burden of interchange costs between fiat currencies and its possible new cryptocurrency, which could cut into the profitability of the business.
Sandler, citing analysis from Barclays, stated that the first version of “Facebook Coin” may be a single purpose cryptocurrency for micro-payments and domestic p2p money transfer, which is considered quite similar to the original credits from 2010.
The analysts also assessed the capacity of the project. He noted that it is bigger than previous ambitions of Facebook. The analyst pointed to the leader of Facebook’s blockchain and cryptocurrency team, David Marcus. Interestingly, Marcus is the former president of payment operator PayPal. He also noted that Facebook has lately hired a number of employees from Chainspace, a blockchain-based startup.