Nope. They’re not called ZuckerBucks.
This new digital currency that Facebook has just recently introduced is called Libra and it isn’t as complex as you think it is.
Let me break it down for you.
What is Libra?
It is a digital currency that will be run by the Libra Association a Geneva-based entity that has over two dozen founding partners, including Facebook, Mastercard, Visa, Uber and the Vodafone group. Exactly, so it’s not just Facebook that will be managing it.
According to the association, it was introduced to enable a simple global currency and financial infrastructure that empowers billions of people”.
This makes sense to me, because, think about it. We live in a world with cheap data and smartphones with a huge portion of the world’s population having access to it, but, about 1.7 billion adults are still outside the organised financial system in the world.
Libra then serves to be a global, virtual financial institution
Wanna get into the technicalities of it?
One word. Blockchain.
It is a decentralised distributed ledger that basically keeps track of who owns what that runs on in some cases thousands of computers. Oh plus, it’s almost incorruptible and irreversible.
Click on the card above for more details on blockchain technology.
And as you know, Dubai itself has its own Blockchain strategy, which means we are actually quite receptive of this technology.
Anyway, before you start equating Libra to Bitcoin, let me just stop you right there.
First off, everything said and done, Bitcoin is still very niche. Libra, being associated with Facebook, which has nearly 2 billion users has automatically come on the mainstream zone.
Plus, to make it a relative stable currency, not prone to wild fluctuations, the creators of Libra are backing this up with a reserve of real assets.
Libra is expected to be transferable through products such as Facebook Messenger and WhatsApp, with zero fees.
But Libra is not going to live on Facebook and it better not. Given the security and privacy concerns that have arisen off late, it is only logical to find a separate space, a separate wallet for this new digital currency.
And that is Calibra.
Calibra, as Facebook explained in its blog post, is part of a new subsidiary that Facebook and friends have created to focuses on financial services.
The ultimate goal, as Facebook explains, is to eventually enable people to do real life transactions like paying bills, buying a cup of coffee or riding local public transit without using cash.
How is it going to impact all of us here in the UAE?
I know I said that the UAE wants to adopt blockchain, but with its own rules and heavy regulations. Cryptocurrencies are still nascent and this region hasn’t started seeing a mass use case of it yet. In fact, back in 2017, the Central Bank Governor Mubarak Rashid al-Mansouri issued a public warning against using digital currencies as a means of exchange. Reason? He said it could fuel unlawful and illegal activities, which is why most crypto experts are calling for the market to be regulated.
So although Middle Eastern countries are open to adopting blockchain technology, they’ve so far refused to use digital currency.
Also, this part of the world thrives of cash. In a cash-driven society like ours, it is going to be a task to change mindsets and get people to start using it for every day transactions.
Concerns over privacy, shadow banking money laundering and terrorism finance still remain.
Questions about it practical, philosophy and regulations also remain.
Inshallah, we’ll have the answers by the first half of 2020, which is when it is scheduled to launch