Who Is Libra Made For?

In the past month, we extensively discussed Facebook’s new cryptocurrency, Libra, which is set to launch in 2020 under the new name Novi. The Libra could be a big boost to blockchain, and users can access the Libra via Facebook’s subsidiary wallet Calibra, which will be integrated into Messenger and WhatsApp. However, Libra is also expected to be available on other crypto exchange platforms, where traders can exchange the Libra for other cryptocurrencies.


As of now, Facebook is already one of the dominating players in social media and online advertising. In recent years they have also established themselves as a market place. So it is no surprise they are going into the world of cryptocurrency.


The announcement of the Libra has brought much criticism, which sometimes sounds like conspiracy theories, as well as less than positive interest from government officials. There is no doubt that they will bring cryptocurrency to people who otherwise would not be familiar with it. Facebook brings a sense of legitimacy for many people who are sceptical of cryptocurrency. These people, at present, would rather trust traditional banking, despite the number of scandals we saw with those. For them it’s a case of the devil we know rather than the devil we don’t know. Facebook hopes to take that fear of cryptocurrency away.


In addition to that, Facebook’s global reach means they can introduce blockchain and cryptocurrency to places where the technology isn’t very developed, untrustworthy or inaccessible. In fact, areas, where cryptocurrency is not available today, is probably where there is the most potential. The so-called ‘unbanked’ people amounts to a total of 1.7 billion people, all of which would benefit from a medium of exchange like the Libra. We have seen for the past decade how mobile payment solutions work in places like sub-subharan Africa, so let’s see how the Libra can improve on this.


Libra in Developing Countries

As mentioned, mobile banking solutions like M-PESA have sprung up in Africa to help make banking more accessible. These are used by everyone from merchants and suppliers to charities to distributing aid. Upon its introduction, all that was needed was a basic phone. Nowadays, this has advanced into becoming one of the main ways to bank in many African countries. However, these are primarily for smaller transactions, for bigger players in the region, like high-earners, investors or bigger businesses, cryptocurrency provides a much safer and reliable option for them, avoiding any unexpected government interventions. Therefore, it is much better for larger transactions and allows them to engage more with the global market.


Although it’s not just limited to Africa’s elite, cryptocurrency is growing throughout the continent. So much so that some governments in countries such as Senegal and Tunisia are making their own official “e-currencies“, however, for now, Bitcoin leads the way in Africa, maybe to be overtaken by Libra in 2020!


Elsewhere, Venezuelans are using Bitcoin to protect their assets from freefalling along with that country’s currency, the Bolivar. The South American country is suffering a huge economic implosion. While Venezuela is the most recent victim to economic turmoil, countries such as Ecuador and Argentina also had their currencies bleed value due to economic crises. Notably, Ecuador was forced to adopt the US Dollar back in 2000. However, with this instability in the region not going away anytime soon, it is likely the curse of currency-haemophilia in this region will attack again. However, cryptocurrencies could offer a solution to this, instead of the US Dollar (which answers to American trade interests) being the default goto currency when local currencies are failing, why not introduce Bitcoin or Libra as the new defacto currency?


While the idea of Libra or Bitcoin being used as a replacement for national currency is farfetched right now, it is not implausible. Notably, Bitcoin is gaining usage as a secondary ‘security’ currency in developing economies. However, Bitcoin is rather intimidating to use for many people, especially those new to technology, and it has also proven extremely volatile. In regions where you already have enough volatility from economic, political and even from the environment, Bitcoin’s unpredictable nature can feel like putting salt in the wound. This is where Libra has it’s main advantage.


Libra will not only have the backing from the mammoth that is Facebook along with other big players, but also its value will be based on a basket of currencies, such as the US Dollar, Euro, Swiss Franc and many more. This is not to be confused with ‘Stable Coins’ which are digital currencies pegged to one currency in the same way the Danish Kroner is pegged to the Euro. Libra, instead will be diversified and therefore will not be dragged down if one of it’s many base currencies start freefalling. This gives Libra the potential to catch up on Bitcoin in Africa and in other developing regions of the world, where stability can go along way.




Additionally, Facebook has 140 million users in Africa, which is their fastest growing region along with Asia. In Africa, Facebook is mostly used on mobile, where Libra will be primarily used. Furthermore, while Bitcoin is attractive to people who are setting out to look for alternative solutions for banking or those in the know, Libra is going to be integrated with a platform people across all spheres of society are using. Much like the effect mobile banking solutions had on finance in Africa when they were introduced more than a decade ago, this makes cryptocurrency more accessible to more disadvantaged people.


This will not only help isolated and disadvantaged people or small businesses owners, but it will also be a great boost to migrant workers abroad. For those who are sending money home to their family, they can do so inside Messenger or WhatsApp, saving precious time. It also will mean the money will arrive instantly and securely, without interference or duties from the host, the home or intermediary governments and banks.


Libra for Developed Countries

With the Libra, when you land in the airport, your first thought won’t be where to find the nearest ATM or currency exchange. For those in Europe, 2002 ended this for traveller all over the Eurozone, as 11 or then 15 EU states adopted the Euro, replacing their national currencies. Libra is essentially going to have the same effect worldwide for tourist, ex-pats and businesses.


Not only will this save you from being overcharged by someone in a flashy kiosk at the airport, but you will also be able to book things for your trip in advance without incurring extra bank charges. However, you won’t have to leave your home town to experience the benefits of Libra. For example, paying your rent or for your share of last night dinner and drinks will be done inside either Whatsapp or Messenger. You may be thinking though, doesn’t PayPal or my banking app let me do something similar? Well, former PayPal president David Marcus is involved in the development of Libra, however, unlike Paypal, almost everyone has a Facebook account already, so no rushing to download and sign up to the app your friends has.




Keep in mind, Libra in developing countries is not only going to make it easier for you to pay for your dinner last night, it will also make it easier for that restaurant manager to purchase their innovatory, especially from overseas. For one thing, it’s cheaper as there fewer fees, which could lead to reaching more niche suppliers, without worrying about going through multiple third parties to pay them. Often is the case, smaller suppliers prefer cash in hand or do not have the resources to deal with billing foreign clients. However, the food and drinks industry, with their niche suppliers, are not the only people who will benefit, so will many other industries.


Businesses can also use Libra to directly charge customers, much like Apple Pay and Android Pay. Once again, there will be no banks involved and users won’t need a third party app to use the service, except the relevant Facebook app and of course all working under Libra. So the idea is that this will be safer, faster and more user-friendly than what’s out there already.



Cryptocurrency will become more mainstream and easier to use thanks to Libra. Once upon a time, cryptocurrency was reserved for those in the know, with some technical knowledge and surfed the Darkweb. In recent years, cryptocurrency has become more accepted in society, however, nothing like Libra has been seen before to make cryptocurrency part of your daily finance options. The average user probably will have no idea how significant a blockchain based wallet is. Facebook has done this before with social media, bringing it from a teenager’s digital hangout to a global powerhouse used by all ages.


Furthermore, not only will Libra change the landscape of banking for people in the developing countries, but it has the power to reshape flawed banking systems in developing countries, giving people a much better chance to compete internationally. This brings in an era where charities don’t need to worry about corrupt officials stealing donations as they funnel through the banking system there. Where a small business can thrive because they are not limited to local inefficient financial systems.


We will have to brace ourselves with patience, as Libra won’t be introduced until next year. Until then, we will keep you updated with any developments as well as other tech news. So come and subscribe to our newsletter to stay in the loop and or check our site to all that happened so far.



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