Ross Sandler, an Internet analyst at Barclays, has told CNBC that the Facebook Coin when launched could raise $19 billion in additional revenue. He wrote this in a client note, saying a cryptocurrency could establish a new revenue stream for Facebook, aiding its share price, which dropped severely following a series of high-profile scandals last year.
Sandler’s forecast claims that the crypto-based revenue option is something “sorely needed at this stage of the company’s narrative,” and that any advertising-free revenue streams would be approved of by Facebook’s shareholders.
He also pointed out that originally Facebook had a payment scheme that is similar to Facebook Coin in spirit. In 2010, ‘Facebook Credits’ represented a virtual currency that allowed users to pre-pay those credits using domestic currencies and then use them for in-app-purchases.
In a more conservative estimate of the impact of the Facebook Coin on revenues, Sandler quoted the figure of $3 billion, pointing out that Facebook will bear the brunt of interchange costs between fiat currencies and its possible new cryptocurrency, which could cut into the profitability of the business.
Referring to analysis by Barclays, Sandler suggested that the first version of “Facebook Coin” may be a single purpose coin for micro-payments and domestic peer-to-peer (p2p) money transfer, similar to Facebook Credits.
He also remarked that Facebook Coin is one of the most ambitious projects undertaken by the company and that the quality of people it has been hiring to deliver the project, such as David Marcus, formerly of PayPal, supports the idea that this is a big deal for Facebook.
There has been a lot of media interest in the story. The New York Times (NYT) published an article alleging that the social media giant is “hoping to succeed where Bitcoin failed” and pointed to the fact that 50 new employees are working on developing a stablecoin that would incorporate Facebook’s three fully-owned apps — WhatsApp, Facebook Messenger, and Instagram.