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Technology

Facebook unveils ambitious plan for global currency

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Facebook has an obscene reach at 2.38 billion monthly active users. FILE PHOTO | NMG 

Friction is defined simply as resistance to relative motion, a word in current times synonymous with innovation, replacing aged processes or introducing new ways of work. This week, technology juggernaut Facebook, equally loved and loathed, unveiled Libra - a simple global currency and financial infrastructure; an ambitious plan to remove friction from value movement, hoping to bring more affordable, seamless, intuitive and secure user experiences to peer-peer, retail and cross-border exchanges. Purists are falling over themselves trying to make a case for the nonstarter nature of the project citing the ease with which anyone can seed their own non-conformist ledger and hype it.

Some things require a certain scale for markets to entertain the possibility of success. Facebook is smart in the way it has positioned Libra as a hopeful to the title of global currency. The utility of a service is at its core, and in a scenario such as this, users would first ask, where this medium is accepted, how they can access, trade, exchange and consume it.

With poor agency, any innovation is dead on arrival regardless of the promise it carries. The only other contender to this title, in my opinion, is the Telegram Open Network by OTT messaging and ecosystem app Telegram, popular in its own right with over 200 million monthly active users. Telegram went the Initial Coin Offering route with pre-sales open only to a select number of high net worth individuals and a recent partnership with German listed technology firm Wirecard to roll out digital financial service products as a subset of a much broader decentralised internet infrastructure agenda. Honourable mention to Mojaloop, funded by Bill & Melinda Gates Foundation and designed in collaboration with many others including Ripple a real-time gross settlement system, currency exchange and remittance network built on a blockchain connecting banks, payment providers and digital asset exchanges.

Facebook has an obscene reach at 2.38 billion monthly active users and they have cherry-picked a healthy mix of founding partners covering marketplaces, payments, blockchain, venture capital, telecoms, academia and nonprofit, to run with governance, implementation and strategy. Financial might, sector-specific criteria, and technical competency are required to be part of this network, the Libra Association that will operate geographically distributed validator nodes.

Open source roots to support inclusive innovation, a strong viral coefficient, trusted partner framework, stable coin model, wide base of possible interoperable utility and an ambitious shared roadmap point to a strong transformative offering.

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