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A Whiff of Grapeshot: Is Facebook Coin About to Kill the Nation State?

His platforms are daily fixtures in the lives of billions globally and now Mark Zuckerberg is adding a cryptocurrency to his arsenal. Could Libra be the stablecoin that not only brings instant blockchain payments to the masses but simultaneously undermine the authority of central banks and the nation state once and for all? 

Here, TFT asks Yoni Assia and Kerim Derhalli for their highly well-informed thoughts on the matter…

Kerim Derhalli, CEO and Founder of Invstr 

While Facebook’s digital coin technically isn’t a cryptocurrency given that it operates from a largely centralised network, this does serve to distance Facebook from the often roguish and volatile reputation of cryptocurrencies.

That’s not to say that this won’t impact the cryptocurrency market however. With huge backers in Visa and MasterCard, Libra may will represent a watershed moment for the mass adoption of crypto – potentially kick-starting a domino effect of other big brands trying to get in on the digital currency game. Competition is already on the horizon, with many significant financial institutions also looking to come up with a coin of their own to facilitate FX trades.

With huge backers in Visa and MasterCard, Libra may will represent a watershed moment for the mass adoption of crypto

Facebook also needs to be wary that their user-base might not be so quick to catch on to the initiative. With less than half of the platform’s users being under the age of 35 and the number of retirees on Facebook nearly doubling since 2012, the company may find that it has a lack of users who are receptive to the idea of a digital coin.

Also, as a company with an already concerning relationship with privacy, the idea that they may now hold the key to tracking users’ online transactions will spook many and prick the ears of privacy hawks. Following what was a torrid 2018 for the company, Libra could perhaps be a step too far, too soon. Facebook will need to do far more in the coming months to demonstrate to users that it can be trusted with their financial data.

Yoni Assia Co-Founder and CEO of eToro 

Back in 2017 in his Harvard commencement speech Mark Zuckerberg talked about the need for people to have access to money in order to pursue their purpose. With 2 billion users, Facebook has the potential to create one of the largest financial platforms in the world.  

Crypto adoption is about more than money. It’s about global and local politics and the separation of state and money. It can be a powerful tool – hopefully for good. Facebook’s Libra could mean greater financial inclusion and greater access to the digital economy.

Crypto adoption is about more than money. It’s about global and local politics and the separation of state and money

The crypto revolution has sparked an era of non-governmental money. Money that is based on technology rather than on government trust. With over 2.5 billion people unbanked in the world, and the majority of the global population using less liquid or inefficient local currencies, there is a great technological opportunity to connect billions of people to one economy through a currency powered by technology.  

A remaining weakness of the crypto ecosystem is the usability and user experience (UX) which is still quite technical. There are a lot of startups working on creating a better UX for crypto and we expect this to evolve quickly as we move closer to mass adoption.

The Little Corporal

Whatever your opinion of the legacy banks (and TFT’s are well-documented!) it seems the measures put in place to hamper their dominance post-2008 have left the door wide open for a new breed of tech tyranny. In the hands of an increasingly monopolistic Silicon Valley cabal, we could well see the revolutionary vision of Satoshi Nakamoto distorted beyond all recognition. Mr Zuckerberg and his similarly Napoleonic ilk may consider themselves champions of liberté, égalité et fraternité but they’ll find they do more good for humanity in the long-run by simply paying their taxes. 

[Addition words by Matthew Dove]

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