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Facebook's Cryptocurrency Could Be a $19 Billion Revenue Opportunity, Barclays Says (gizmodo.com)
Barclays internet analyst Ross Sandler says the new cryptocurrency that Facebook is working on could be part of a multibillion-dollar revenue opportunity. "Sandler forecasted as much as $19 billion in additional revenue by 2021 from 'Facebook Coin,'" reports CNBC. "Conservatively, the firm sees a base-case of an incremental $3 billion in revenue from a successful cryptocurrency implementation. 'Merely establishing this revenue stream starts to change the story for Facebook shares in our view,' Sandler said." From the report: Facebook is reportedly developing a cryptocurrency for global payments that will be tied to the value of traditional currencies and available to use through its messenger "WhatsApp," according to Bloomberg and The New York Times. Facebook has not publicly commented on the reports. Price volatility has been one major roadblock to bitcoin's widespread adoption as an everyday payment option. But Facebook's digital currency, a "stable coin," would likely be less attractive to speculators because of its fixed price tied to a currency like the U.S. dollar.
"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," Sandler said. Barclays based its Facebook revenue estimates off of Google's digital distribution service, which is also the official app store for Android's operating system. "Google Play," as it's called, generates $6 in "net" revenue per user now. Facebook could see a "similar cadence," across its nearly 3 billion users in 2021. A Facebook virtual currency would allow for more premium content to find its way back to Facebook, Sandler said, as companies re-establish themselves on the social network as a strategic partner.
"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," Sandler said. Barclays based its Facebook revenue estimates off of Google's digital distribution service, which is also the official app store for Android's operating system. "Google Play," as it's called, generates $6 in "net" revenue per user now. Facebook could see a "similar cadence," across its nearly 3 billion users in 2021. A Facebook virtual currency would allow for more premium content to find its way back to Facebook, Sandler said, as companies re-establish themselves on the social network as a strategic partner.
They can't even manage to keep my email address private, now I'm going to trust my finances to their imaginary currency that nobody wants? Sure thing. Let me sign up for that right away.
I wonder what the pitch is: "It's like US dollars, except only online, and harder to spend."
Can't wait until we have entire exchanges based on made-up , house-brand currency. Facebook Dollars, Amazon Samoleans, Starbucks Bucks. I feel like people have tried building a system of imaginary currency before. Can't recall the name because why would anyone know the name of that any more.
A stable coin fixed to USD is simply fiat credits held by a custodial account which is a very old business practice. The additional revenue will come from fees and services people pay to facebook when they buy these credits or "gift cards". Many services like youtube already have tipping with fiat doing this so there is nothing unique except them using the term "crytocurrency" as a marketing gimmick.