Mark Zuckerberg has already changed the world, and through this new challenge to banks and payment systems, we believe he will do it again!
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When Libra was born, Facebook’s cryptocurrency, the initial idea aimed at facilitating the payments of expatriate Indian workers, using Whatsapp as tool, given the size of the industry: in according to the World Bank, India gets proceeds from remittance payments of about $ 69 billion in 2017, and the trend is growing.
Instead, during the project development, Libra has become much more and it is not very far the day when it will be possible to buy or sell simply showing a code on the smartphone, without receipts, bank closure issues, and, above all, currency fluctuations. The other relevant thing is that this system will also be open to 1.7 billion people around the world who do not have a banking account.
Therefore, the cryptocurrency Libra is the new venture of Mark Zuckerberg, an amazing deal ready to the launch in the first half of 2020, with these features:
- Libra will be indexed (that is, its valuation will depend on) to a basket of currencies including dollar, euro, yen, Swiss franc, and other currencies chosen because of their soundness in order to avoid strong fluctuations and volatility.
- Libra will have a dedicated blockchain (a sort of electronic register to guarantee its security) and will make it possible to make purchases or exchange money through Whatsapp and Messenger, the Facebook operational tools with more than 2 billion users (at least for now).
- Libra will be managed by Calibra, a foundation based in Geneva, Switzerland with currently 28 partners (including Mastercard, PayPal, Visa, Vodafone, Uber, Spotify, Farfetch, Ribbit Capital) which Zuckerberg aims at bringing to a hundred.
Calibra will be the beating and governance heart of Libra: each of the members pays ten million dollars to access the foundation and the goal is to reach a billion dollars, which will be invested in the coins in order to make sure exchange rate stability. Even if the members of the foundation play a role within the blockchain, the management will depend on David Marcus whose main goal is to achieve the integration of Libra with the financial markets.
Zuckerberg has launched into an apparently insane project: coining money to compete with central banks and without some big players, such as Apple, Google, Amazon and Microsoft (actually). Plus, there is the absence of US banks and the obstacles related to the authorization form the control authorities.
However, Zuckerberg, who is not exactly a fool, is challenging a market opportunity. In addition, while, on one hand, Facebook is still under the crossfire for the data dragging from Cambridge Analytica scandal, on the other hand, its founder aims at making free and innovated the P&L set-up, that currently depend on ads more than 98%. Hence the choice to enter the payment systems industry by leveraging the skills, leadership and strength of its brands. The same David Marcus, Head of Calibra with the responsibility for the governance, says a lot: Responsible for all messaging products at Menlo Park, but former President at PayPal and former Board member at Coinbase, the biggets cryptocurrency management platforms.
Therefore, the team Zuckerberg-Marcus promises sparks in the global challenge to banks and credit cards!
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