Some analysts believe that step could be a game-changer for Facebook. It could potentially add billions of dollars to the social media company’s annual revenue.
According to reports, Facebook is looking at introducing the cryptocurrency for global payments. The digital currency will tie in to traditional currencies.
It will be used to facilitate in-app payments through its internal messenger program as well as WhatsApp. Tying the currency to existing currencies should make it more stable a significant obstacle to existing cryptocurrencies.
Fundamental change for Facebook
High volatility due to substantial investment by speculators has made broad adoption of cryptocurrency for payment. It’s a tough sell to both vendors and customers.
Facebook’s business model has been under the microscope for years now. The move into cryptocurrency could well change the fortunes for the social media giant.
Creating a stable and secure payment solution available could also facilitate a fundamental change in the value offering of the company. It could also entice premium content creators back into the Facebook ecosystem. Barclays internet analyst Ross Sandler said:
“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 shareholders.”
A $19 billion boost
Barclays has looked at the success of the Google Play Store in estimating how much a cryptocurrency could add to the Facebook bottom line.
With the Play Store as a benchmark, Barclays believes the addition of payments could add as much as $19 billion in revenue across the 3 billion global users it estimates by 2021.
Facebook has been aggressively building up its blockchain capability. Sandler feels that if the payment solution is a success, there’s no reason why the company won’t look at adding consumer lending, remittances and physical payments as part of its future offerings.