Facebook’s decision to create their own stable coin came in as a surprise for many, however, the decision has already created a buzz in the market and now a Barclays analyst has come out to predict that the stable coin might generate $19 billion in additional revenue for the social media giants.
Ross Sandler, the Barclays analyst believe that the Stable coin payment protocol can bring in extra revenue of billions and also take the share prices further up, which took quite a hit in 2018 amid Cambridge Analytica privacy scandal.
The stable coin is being pegged to be used on the chat platform WhatsApp and this could prove a brilliant plan as it would generate extra revenue apart from the advertising revenue that the company is heavily dependent on. The stable coin which is still in its preliminary stages would be perfect for a platform like Facebook given the billions of users that it posses.
Thus, Sandler believes that the launch would not only bring in extra revenue to the company but also impact the value of its shares on a positive note. Sandler said,
“Merely establishing this revenue stream starts to change the story for Facebook shares in our view.”
The stable Coin is the new Trend
Stable coin based payment portals has become quite a norm in recent times. It started with the JPM coin and now many traditional investors are looking to expand their portfolio into cryptocurrency with a stable coin of their own.
Facebook’s stable coin would be pegged against a number of fiat currencies, providing great options and opportunities to the investors and users to invest in it. Sandler sees the move as perfectly timed as it would help the social media giants to earn back the trust of its shareholders and attract more customers and revenue from the same. Sandler explains,
“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.”
Facebook Stable Coin is not The First Attempt To digitalize Currency
The recent news of Facebook entering the decentralized space through its own stable coin is not the first attempt by the company to digitalize currency of use on the platform. In 2010, the company created something called “Facebook credits’ whose functionality was similar to the modern-day cryptocurrencies. Users could buy these credits in exchange for fiat and then the credits could be used for in-app purchases.
However, the early digitization proved costly for the company as they had to incur the conversion charges which was one of the prominent reasons for the project to be scrapped.
Sandler believes that the early use of Stable coins will be limited to micropayments,. as it progresses the coin would touch other aspects of payment portals on the Facebook platform and hopefully enhance the user security as well.