Facebook’s announcement of its planned cryptocurrency, Libra, has created much debate.
The plan has been welcomed in some quarters as a way of helping financial services reach the unbanked but these views have been more than counterbalanced by a high level of scepticism.
There are certainly some major challenges facing Facebook including overcoming scepticism and keeping regulators happy. Read this blog post I did earlier.
But what do fintech’s think of Facebook’s plans. I asked the question and got some interesting responses.
Charles Delingpole, CEO at anti-money laundering system provider complyadvantage agreed there will be significant challenges operating a global payment system on the scale that Facebook intends to create.
“Given the multitude of problems that Facebook has when defending against fake accounts and fake news, the creation of fake payments are an entirely different problem,” he said.” Fake payments can result in money laundering, terrorist financing and all kinds of horrific consequences.”
He said banks, corporates and fintechs have huge problems with this, so it is very unlikely that Facebook itself can succeed where others have failed.
Sylvia Carrasco, CEO of gold trading platform Goldex Technologies said Facebook could transform the image of cryptocurrencies. ”The volatility of cryptocurrencies is one of the main reasons why digital currencies have been pigeonholed as an attractive speculative asset – and nothing more. But the launch of Facebook’s ‘stablecoin’ could change that forever, and finally deliver crypto to the masses. We look forward to seeing whether the world’s most influential social media player will pull this off – and what it means not just for the future of payments, but also the future of long term investment and savings.”
She added that at present, given the price fluctuation of Bitcoin and other altcoins, nobody would dream of transferring their parents’ life savings into crypto. “ But who knows what the future will bring.”
Meanwhile Michael Kent, CEO at digital money transfer service Azimo is forward to seeing how Facebook’s Libra currency pans-out, “particularly in regions where there’s a high concentration of people with limited access to financial services. “
“The launch of Facebook’s cryptocurrency is a great example of a fintech innovation disrupting the traditional financial services sector and shaking up the industry. Hopefully this will inspire other big tech titans to move faster in this area and to use their technologies and vast global networks to provide better services for consumers, especially the unbanked in emerging markets.”
Alex Baitlin and CEO at digital assets security company Trustology, who was previously UBS Blockchain lead is excited about the idea that over 2 billion people will be introduced to crypto currencies and blockchain concepts.
“This is a significant turning point for financial services and will give global central banks the agency to expedite the issuance of their own digital currencies,” he said. “A number of central banks are already working on developing a stablecoin.”
If you have any thoughts on Libra please leave a comment.