It is very likely that this is not the first time you are hearing about ‘Libra’ and if this is your first time, this is a good opportunity to add it to the list of trends on your radar.
Libra is simply Facebook Inc’s digital currency that is powered by Blockchain, the same software behind Bitcoin, the world’s most popular cryptocurrency with an average price of $9,300 per bitcoin.
However, Facebook’s Libra is kind of different and its eventual launch will change the face, structure, balance of power and the future of banking as well as financial services globally.
The Libra project is Facebook’s plan for an end-to-end integration of the digital currency The company plans to launch a wallet called Calibra. The tokens will be stored in Calibra, however, it will be linked to its core products such as Facebook, WhatsApp and Instagram.
With Libra, a ‘Shade Omotoso’ in the middle of Balogun market in Lagos Island, can send money to a ‘Min Cheng’ in Guangzhou China within two seconds for her clothing materials without filling a form, leaving her store or been charged high transaction fees eats into her profit.
To be overseen by several payments and tech giants, called the Libra Association, Facebook assembled about 20 elite founding members including Mastercard Inc, Visa Inc, Spotify Technology SA, PayPal Holdings Inc, eBay Inc, Uber Technologies Inc and Vodafone Group Plc. The company said it plans to grow the membership to 100 by next year.
Counting the Cost
At SBI Media, we believe Libra is Facebook’s attempt to launch a global bank that will allow anyone from anywhere in the world to send and receive money. As a result of the highly-insignificant transaction fees to be charged, many customers, particularly retail banking customers would find it very attractive for local and international transactions.
Libra will change the face and future of the global eCommerce scene. Apart from increasing ease of processing payments, shopping and trading on the likes of Amazon, Alibaba and Asus; Libra will bolster the growth of small and emerging eCommerce startups from any part of the world by cutting costs and increasing their access to global markets.
FYI: In case you are wondering why the picture of an African woman is used to illustrate this article, then, you might not realize the scale of change that is coming.
This is a picture of a Nigerian lady at our own Balogun Market used as the headline image on Libra’s website. Facebook plans to target over 1.7 billion ‘unbanked’ population across the world and Nigeria holds a major part of this community.
Unless Nigerian banks and financial services providers find a way of joining the Libra Association, directly or indirectly, Libra could shave hundreds of billions from their revenue.
Winter is coming!
© SBI Media. This article was published by SBI media in their Nextgen newsletter of June 24, 2019.