Market Overview

RBC Says Facebook's Libra Could Be A 'Watershed Moment' For Cryptocurrency

RBC Says Facebook's Libra Could Be A 'Watershed Moment' For Cryptocurrency

Facebook, Inc. (NASDAQ: FB)'s launch of its own branded digital currency called Libra could prove to be a "watershed moment," according to RBC Capital Markets.

The Analyst

RBC's Mark Mahaney maintains an Outperform rating on Facebook with a $250 price target.

The Thesis

Facebook's Libra addresses the need to create a digital currency and infrastructure to power the "internet of money," Mahaney wrote in a note. The platform will be built on a blockchain backed by a reserve of assets that gives the digital currency intrinsic value. The platform will also be overseen by the independent Libra Association.

Facebook's "White Paper" on Libra calls for a new programming language for the Libra protocol called Move, Mahaney wrote. Transactions will be based on user-defined smart contracts based on the new protocol.

Overall, Facebook's goal is to create "a decentralized, programmable database designed to support a low-volatility cryptocurrency that will have the ability to serve as an efficient medium of exchange for billions of people around the world."

Facebook's initiative boasts similarities to Apple Inc. (NASDAQ: AAPL)'s launch of the iOS platform to developers more than 10 years ago, according to Mahaney.

Price Action

Shares of Facebook were trading higher by 2.4% at $193.50 ahead of Tuesday's market open.

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Latest Ratings for FB

Jul 2020Morgan StanleyMaintainsOverweight
Jun 2020Goldman SachsMaintainsBuy
May 2020StifelMaintainsBuy

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