Facebook’s Libra is a gamechanger for humanity and a growth platform for GoodDollar

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Tal Oron is GoodDollar.org Interim Executive Director

Of the 5.7 billion adults on the planet today (out of 7.7 billion people in total), it is estimated that some 30 per cent (1.7 billion) do not have access to a bank account, according to the latest World Bank statistics. Facebook’s newly announced Libra cryptocurrency has the potential to change the game for those so-called “unbankables”. Here’s why.

‘The unbankables’ sounds a little like a reality television programme, but adults who do not have access to official financial services is no laughing matter. The vast majority of unbankables live in developing countries, where for centuries business has been done using cash in hand. The bureaucratic and often painful process to open a bank account, including producing certain documents, is unappealing — or impossible — to many in poorer communities.

In 2015, Global Findex estimated that there were 2 billion unbankables in the world. Pleasingly, that figure has been reduced, thanks to the invention of mobile money — M-Pesa, launched in Kenya in 2007, is the biggest success story. Libra, and crypto more generally, has the potential to go one step further than this and bank vast numbers of people with ease thanks to blockchain technology.

At GoodDollar, we believe Libra will greatly accelerate the adoption of cryptocurrencies in general and will contribute towards a more open financial ecosystem. It could also spur on fiscal stimulus programmes on a global scale. In simple terms, the difference between government-backed fiat money and crypto is that the latter is decentralised and, thanks to the blockchain distributed ledger technology, effectively takes out intermediaries, thereby making a transaction both more incorruptible and transparent, as well as cheaper.

Facebook’s recent announcement about Libra’s 2020 release is truly exciting because it is likely to create an incredible — and instantaneous — impact for a colossal amount of people on the titanic social media platform, and beyond. Since the launch of bitcoin, in January 2009, crypto assets have offered an alternative financial route as opposed to the traditional way, and Libra’s capabilities will help educate so many new people on what is possible. It will effectively open financial opportunities for the 2 billion Facebook users — almost a third of the planet.

Not only is the presentation of a unique, reliable financial infrastructure likely to promote economic activity, but the openness and transactability may also introduce consumers in unbanked regions to already existing solutions for microfinancing or local development loans.

By collecting data on the pseudo-transparent transaction history on Libra and related protocols, researchers will be able to gain reliable insights into fiscal development in underbanked regions, enabling them to target fiscal stimulus programmes directly within regions with slow or negligent economic development.

Similarly, as Facebook’s Libra seeks to open up the banking system and improve inclusion, GoodDollar is a cryptocurrency that has been designed to address global wealth inequality.

The not-for-profit GoodDollar project explores how decentralised cryptocurrencies and blockchain technology may enable models based on universal basic income (UBI).

GoodDollar doesn’t want world domination; it begins from a humble place of the fortunate, realising their power and their responsibilities to wider humanity. GoodDollar has a built-in direct giving mechanism to empower all or targeted users of the currency. The value it creates goes to the users of the currency, rather than to the rich enterprises who, functioning as the validators-nodes to Libra’s blockchain.

GoodDollar will start by providing the associated cryptocurrency — GoodDollars — as an alternative economy. For us, Libra’s development is also important as it will likely contribute fundamental support for global fiscal stimulus programmes, currently pioneered by the OpenUBI movement, which GoodDollar helped to establish in November 2018. Here, entrepreneurs and innovators explore the possibility of delivering economic impact at scale, unconstrained by nation states or coercive local influences.

The power of Facebook delivers far more reach than any other network today. It is the user growth engine for underprivileged communities, and Libra, by all indications, is the next stage of Facebook’s development. It will bring much greater heft, legitimacy and access to cryptocurrencies.

For us, Facebook is an enabler for greater, better and fairer consumer choices in our financial infrastructure. Facebook is maybe the most powerful institution to make governments, regulators and institutions alike have difficult, but necessary, conversations around crypto assets regulation and mainstream use.

And given Facebook’s massive branding power and global success, adoption might not take long. Within three days after the announcement even my Mum was talking about Libra — already it is as though it has been a household name for decades and embedded into our culture.

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