Social media giant Facebook has garnered a lot of attention for its purported cryptocurrency initiative dubbed ‘Facebook Coin’. Barclays analyst Ross Sandler reckons that if Facebook can play its cards right, it can bring in anywhere between $3 billion to $19 billion in revenue through its cryptocurrency project by 2021. Sandler forecasted this in a note presented to clients, first reported by CNBC.
Facebook is said to be secretively developing a cryptocurrency for global payments through its popular ‘WhatsApp‘ messenger platform. The price of this stablecoin is expected to be pegged to a basket of the major fiat currencies. This, in turn, will remove the problem of price volatility which is seen as a major hurdle for mainstream adoption. In addition, a stablecoin pegged to multiple fiat currencies might also help the cryptocurrency get greater adoption across geographies. Facebook has also set up a team of than 50 engineers (and is hiring more) for the project, led by senior executive David Marcus.
The bullish analyst note points to the fact that Wall Street is excited about Facebook’s prospects in the cryptocurrency space. Expanding into payments can give Facebook a new direction after the myriad of issues that held the company back in 2018. Sandler also pointed out the company’s earlier tryst with Facebook Credits – a virtual coin/credits feature which consumers could use for various services, back in 2010.
From that sense, ‘Facebook Coin’ could be a great way for the company to move beyond its advertising revenue that has been met with a little bit of resentment in the past. The cryptocurrency feature can be leveraged beyond remittances to e-commerce, retail and investments creating a powerful economy within the Facebook ecosystem.
Of course, providing a proper value proposition to users by offering them a convenient mode of payments in a trustless and regulated fashion will be one of the biggest challenges for Mark Zuckerberg & Co. However, if the project turns out to be a success, Facebook may just become the most important company in the cryptocurrency space!