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The blockchain and crypto space has benefited greatly from big corporations adopting the technologies, boosting confidence in the future of the technologies and encouraging other smaller companies to jump on the bandwagon as well. Samsung, HTC, IBM, Walmart, and Unilever are just some of the names working on their own implementation of blockchain technology.
Facebook is another big company working on a stablecoin meant to enable the social network and WhatsApp users to be able to transfer money digitally. What’s special about Facebook is that it just got a nod of approval and a revenue projection of a whopping $19 billion by the esteemed British investment bank, Barclays.
According to Barclays, the multinational investment bank, Facebook’s stablecoin could generate a whopping $19 billion in revenue for the company. Ross Sandler, an internet analyst at Barclays said in a note to clients on Monday that Facebook’s upcoming cryptocurrency has a great future ahead. Sanders also talked about the fact that Facebook’s intention to get into payments processing is a decade old but due to some logistical and business model issues. Specifically, regarding the interchange cost, “which negatively impacts the profitability of the business, especially when making high volumes of lower-value transactions.”
The situation has changed since then, however. Today, cryptocurrencies and blockchain technology have matured. Similarly, Facebook has significantly grown over the years with the inclusion of Instagram and WhatsApp into their portfolio which expanded their user base massively. Sanders said that the new cryptocurrency could “re-invigorate that business strategy.”
Over the last year or so, Facebook has come under a lot of pressure for their policies regarding their user’s data privacy. Multiple scandals painting Facebook as the big bad wolf of bad user privacy practices have hurt their reputation. A revenue stream disconnected from their projects related to advertising and users’ data will be well received by shareholders. Sanders was of a similar view, stating:
“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.”
The long-term fallout of a brutal year in brand reputation is yet to be seen; however, Facebook might be able to shift a majority of their revenue dependence away from their social media platform just in time to avoid a permanent damage following the fallout. The stablecoin to be launched by the company certainly seems as one such revenue stream.