Sandler forecasted as much as $19 billion in additional revenue by 2021 from "Facebook Coin." Conservatively, the firm sees a base-case of an incremental $3 billion in revenue from a successful cryptocurrency implementation. Facebook is reportedly developing a cryptocurrency for global payments that will be tied to the value of traditional currencies and available to use through its messenger "WhatsApp," according to Bloomberg and The New York Times. Facebook has not publicly commented on the reports.
Price volatility has been one major roadblock to bitcoin's widespread adoption as an everyday payment option. But Facebook's digital currency, a "stable coin," would likely be less attractive to speculators because of its fixed price tied to a currency like the U.S. dollar.
A Facebook virtual currency would allow for more premium content to find its way back to Facebook, Sandler said, as companies re-establish themselves on the social network as a strategic partner.
Challenges remain. Facebook needs to demonstrate a value proposition for users "above what is available today in payments" and build trust after its laundry list of issues in 2018, Sandler said. Global payments systems also tend to bring more regulatory scrutiny.
But if the stable coin is successful, Sandler said, he sees no reason why Facebook couldn't get into consumer lending, remittance and physical payments "eventually."