While Mark Carney, Governor of the Bank of England, has been positive about the idea of Facebook’s proposed Digital Currency Libra, the French Finance Minister, Bruno Le Maire, says “Non”Le Maire said, “we cannot authorise the development of Libra on European soil”. Le Maire was not so clear as to how such a ban would be enacted, although it does illustrate the fever of feelings that Facebook has proposed its Digital Currency has generated. However, the Finance Minister also hinted about setting up a public digital currency under the aegis of international financial institutions. The German reception has been equally hostile with the German finance minister saying, "it will ‘clearly reject’ tokens like Facebook’s forthcoming Libra token, with Berlin hoping to push the rest of the international community to follow suit”.
Facebook, itself, has promoted Libra as a way to offer the 1.7 billion “unbanked” people (adults either without bank accounts or those who use services outside the banking system, such as payday loans) access to banking services. Initially, it was rumoured, in 2018, that Facebook would launch Libra in India (where it has most users - see below)
Authorities in India have made it clear they are not keen on a digital currency owned and controlled by one corporate entity, so it would appear that launching Libra in India using WhatsApp is unlikely to happen. However, as the chart above shows, Facebook has millions of users in Indonesia, the Philippines, Vietnam and Thailand. Given that these countries have a high % of their citizens who are young and tech-savvy, will Facebook focus on countries, such as these, first?
Facebook, as reported by the FT, is due to meet 26 central banks which are to quiz the ‘tech giant’ on its plans to launch Libra. The French, who currently holds the presidency for the G7, have managed to organise this meeting, and a report is being prepared for G7 members in October this year to look at digital currencies.
Libra has not been universally welcomed by many Western economies but if Facebook is serious about launching its digital currency to help the unbanked, then surely Facebook needs to focus on countries where the “banked” actually reside. Therefore, could Facebook create a different version of Libra that is pegged to a basket of countries’ currencies, such as Indonesia, the Philippines, Vietnam and Thailand (where Facebook already has a strong foothold). While it may mean that this new style of Asian Libra will not be treated as legal tender in the USA or Europe. In Germany, Facebook has 26.8 million users and in France, 28 million. As the chart above demonstrates, Indonesia, the Philippines and Vietnam singularly have more Facebook users than both the customers of France and Germany combined.
As an aside, Facebook has been testing with Instagram to remove the number of ‘likes’ people receive. The idea is to prevent users from comparing themselves against others and feeling disgruntled if their content doesn't achieve as many ‘likes’ as someone else. A possible replacement could be to reward its users with some kind of token instead, to encourage people to keep posting (as this helps Facebook’s advertising, and hence profitability).