Facebook’s Libra has a mission statement that they find to noble enough for its users, and it goes as follows:
Reinvent money. Transform the global economy. So people everywhere can live better lives.
So, what’s the motivation behind this cryptocurrency system? If the mission statement is noble, their motivation must be just as epic.
Facebook wanted to initially make Libra so that people from the developing world and people from parts of the developed world could access a bank – without the unnecessary fees associated with wire costs, overdrafts, ATM’s, etc. Basically, Libra wants to be a bank where there’s limited access to a bank – which is perfect for undeveloped countries.
Libra has a set goal for themselves: They want to bring financial services to over 1.5 billion people around the world who don’t have access to standard bank accounts.
Yes, over 1 billion people have access to a mobile phone; and yes, over half a billion people have internet access day in and day out. But, that doesn’t mean that they have 24/7 access to banking services like they could with Facebook’s Libra.
It’s called “unbanked,” or so financial services leaders in New York and London call it. Why is the system called “unbanked?” Because it technically does not want to be associated with the banking system – and not being associated with the banking system means that Libra can avert a lot of the issues rooted in banks. For instance, the high, unpredictable fees, as mentioned above.
The ultimate, #1 goal of Libra here, is to have what is called “financial inclusion” – globally. Its potential enormous user base will help make this happen.
There are a few glitches in the system so far, though. For instance, using Libra as your primary form of currency will still require access to a smartphone or a computer – something that not every person has, especially in a developing country. However, the numbers have been showing leading business men and women that more than 5 billion people now have access to, or own, a mobile device. And, those numbers keep rising, especially in the younger populations of developing countries.
When Libra comes out, all that want to adopt the cryptocurrency system need to have a government-issued ID to set up a bank account through the non-profit organization known as Calibra – the institution running Facebook’s Libra. This may cause outstanding issues for some, but may not be a problem whatsoever for others.
In the beginning, the United States is not likely to be involved with the cryptocurrency processes. According to a Facebook spokesperson, Calibra will not be available in US-sanctioned countries. It will also not be available in any country that bans cryptocurrency actions.
Ultimately, this means that areas of the world such as China, North Korea, Iran, and India may not be in on the action at first, either.
As we’ve said before, and as we’ll say again, time will tell how the Facebook Libra system will pan out.