Facebook (FB) - Get Report was the lone FAANG stock in positive territory at the start of trading Friday following a report that more than a dozen companies were ready to back its upcoming digital currency.
Dow Jones Newswires reported that several big-name tech companies, Uber Technologies (UBER) - Get Report and PayPal (PYPL) - Get Report , as well as traditional payments firms such as Visa (V) - Get Report and Mastercard (MC) - Get Report , were supporting the social media group's cryptocurrency, which is plans to unveil next week. The report said firms would invest $10 million each to support the coin, which will be pegged to a basket of global fiat currencies.
Dubbed GlobalCoin and expected to launch next year, the drive would give users the ability to concert their local currency into a Facebook-useable digital coin that could be used for payments or transfers. The structure could be similar to the digital currency established earlier this year by JPMorgan Chase (JPM) - Get Report , which was designed to develop the bank's payments business over blockchain technology.
Facebook shares were marked 1.64% higher by mid-afternoon trading Friday and changing hands at $180.40 each, a move that would take the stock's six-month gain to around 25%.
RBC analysts Mark Mahaney and Zachary Schwartzman told investors that Facebook's cryptocurrency launch may prove to be "one of the most important initiatives in the history of the company", supporting growth in payments, e-commerce and applications and gaming.
"If Facebook's foray into crypto proves to be successful, we believe a potential existential risk may arise from a rapid, global consumer adoption of crypto tokens for
payments and commerce," the pair said. "Specifically, we believe this could become an existential risk for banks and other traditional, centralized platforms."
Facebook CEO Mark Zuckerberg has also stressed the company's near-term focus towards e-commerce offerings, promising investors that the group will build "more tools for people to buy things directly through the platform."
"Over the long-term, if Payments becomes a really important part of what we do, we can - we'll have some options and choices about how we choose to - how to have the revenue flow to us in the future," Zuckerberg told investors following the company's second quarter earnings in April.