Facebook's new cryptocurrency platform could provide the struggling social media giant with a new revenue stream of historical proportions, a possible federal antitrust investigation and ongoing monitoring of its data privacy practices.
Mark Zuckerberg's company is expected to provide details on its cryptocurrency, code-named Libra, in a white paper to be released on Tuesday, TechCrunch announced. Early reports suggested that the new digital piece would allow Facebook's base, which has more than 2 billion users on Facebook, Instagram and WhatsApp, to transfer money and buy property. no charge.
According to RBC Capital Markets, Facebook's cryptocurrency could thrive in emerging markets, offering a more stable alternative for money transfer in volatile currency zones and unstable governments. The company expects "Balance" to facilitate person-to-person payments, traditional e-commerce, and spending on gaming applications or services on Facebook-owned properties.
"We believe this could be one of the most important initiatives in the company's history to unlock new sources of commitment and revenue," RBC Capital Markets analysts said in a note to investors. .
RBC has set a price target of $ 250 for Facebook shares, compared to about $ 187 currently.
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Facebook has already partnered with more than a dozen companies, including Visa and PayPal, who have invested in cryptocurrency and will help oversee its use, the Wall Street Journal reported. . Cryptocurrency would be linked to several traditional fiduciary currencies in order to protect the "Balance" of price volatility that has hurt other major digital currencies such as bitcoin.
Company officials warned in April that Facebook could face a record $ 5 billion fine to settle a Federal Trade Commission investigation into its data privacy practices. Facebook is also part of the high-tech companies, including Google and Amazon, which are expected to be scrutinized by the federal government in the coming months due to possible antitrust violations.
With record control of Facebook's practices, cryptocurrency could transform the company's business. Ross Sandler, an analyst at Barclays, predicted in March that digital currency could generate up to $ 19 billion in new revenue by 2021.
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"The simple fact of establishing this source of revenue is beginning, in our view, to change the history of Facebook sharing," said Sandler.