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Barclays predicts Facebook Coin revenue could reach $19 billion

Sanmi Adeagbo | Mar. 12, 2019
Barclays predicts Facebook Coin revenue could reach $19 billion

Barclays Bank analyst has predicted that the rumored Facebook coin would generate up to $19 billion in revenue for the firm by 2021.

March 12, 2019. | AtoZ Markets - Facebook is not new to the spotlight. The tech company is getting stabilized after seeing its stock price plummeted last year following controversies involving data breach. In 2018 also, the tech giant lifted the bans on cryptocurrency ads. Perhaps the Facebook-related news that concerned the crypto industry most was the rumored direct involvement of the company in cryptocurrency and blockchain technology in December 2018.

Facebook launching 'Facebook Coin' in 2019?

Multiple media outlets reported that Facebook is preparing to launch its own cryptocurrency called ''Facebook coin'' in the first half of 2019. The reports added that Facebook will design its own blockchain on which the digital coin will be hosted. In addition, the digital currency will be pegged against the USD and will, therefore, be made a 'stable coin'. Though Facebook has not responded to this rumor yet, it seems the company is looking in this direction to stay as the leader of the social media industry.

Facebook coin could generate $19 billion in 2021

As reported by CNBC on 11th March, a Barclays internet analyst, Ross Sandler, has predicted a huge turnover for Facebook if the company proceeded with this development. In notes sent to clients, Sandler included that Facebook would generate between $3 billion and $19 billion in additional revenues by 2021 if it introduced its digital currency across its platforms - Facebook, Instagram and WhatsApp.  

Facebook generates most of its revenue via advertising. However, a cryptocurrency could create a new revenue option for the company which could then boost its share price. Sandler forecast that shareholders would welcome an advertising-free revenue.

How Facebook Coin will function?

According to Sandler, the company already operated a similar payment system like a cryptocurrency in the past. In 2010 Facebook sold the so-called advertising credits which represented a virtual currency that could be pre-paid for, by clients using domestic currencies on their credit cards. Facebook bore the inter-change costs thus the idea didn't work out well as the company's profitability dropped.

Eight years after, the payment processing market and technology have advanced hugely with the evolution of cryptocurrencies and blockchain technology. The company wants to launch its own cryptocurrency that would suit its business strategy. For this purpose, Sandler expected Facebook coin to be a one-purpose digital currency that is only suitable for domestic peer-to-peer money transfer and micro-payments. Based on many reports online, Facebook is hoping they can succeed where Bitcoin failed with this crypto project that has been jealously kept away from prying eyes. 
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