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Cramer Says Facebook's Crypto Ambitions 'Brilliant,' Citi Analyst Talks 'Watershed Moment'

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Cramer Says Facebook's Crypto Ambitions 'Brilliant,' Citi Analyst Talks 'Watershed Moment'

Social media giant Facebook, Inc. (NASDAQ: FB) confirmed plans Tuesday to launch a new digital currency, Libra, next year. 

Cramer: 'Brilliant'

Facebook's digital currency ambitions are backed by 27 other businesses and nonprofit organizations.

The company can leverage this information to show lawmakers that it can be trusted to serve 2.6 billion people across the world who are "underbanked," Cramer said during CNBC's "Squawk on the Street" Tuesday.

Facebook's move is "brilliant," as it "disintermediates" traditional payment companies, Cramer said. The proof of this is likely in the complete absence of payment companies among Facebook's original partners, he said. 

Kerner: 'Sounds A Lot Like A Bank'

Facebook's new cryptocurrency initiative includes loans and money transfers, making it "sound a lot like a bank," Lou Kerner, a partner at CryptoOracle, also told CNBC Tuesday.

At its core, Facebook's new initiative is centralized rather than decentralized, he said — a pillar of cryptocurrencies. 

Facebook said it won't mix data from its cryptocurrency with the data it collects from its core social business.

This doesn't mean the company won't be using  purchasing data for marketing purposes, Kerner said, adding that Facebook's partners are involved specifically to "get access to that data so they can market to you."

Citi's May: 'Much Less Speculative'

Facebook's cryptocurrency is meant to be "much less speculative," since it is backed by a handful of partners and assets, Citi senior internet analyst Mark May told CNBC Tuesday. Instead, Facebook is building out a "real life substitute" for cash, he said. 

The company is taking a long-term approach to its initiative, rather than hoping it will drive e-commerce transactions "on day one," May said. Ultimately, Facebook wants to build a community that matches consumers with business in a different way, the analyst said. 

"It is a watershed moment for the company." 

Related Links:

Positive Vibe Ahead Of Fed Decision, And Facebook Creates Buzz With Cryptocurrency

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

Photo courtesy of Facebook. 

Latest Ratings for FB

DateFirmActionFromTo
Jun 2019MaintainsBuy
Jun 2019UpgradesNeutralBuy
May 2019Initiates Coverage OnBuy

View More Analyst Ratings for FB
View the Latest Analyst Ratings

Posted-In: CNBC Jim Cramer LibraAnalyst Color Cryptocurrency Markets Analyst Ratings Media Best of Benzinga

 

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