Cryptocurrency does not solve the problem of financial inequality. And it’s not them

Facebook is rarely accused of humility. But even the world’s largest social network understands that she has an image problem. The scandal over misuse Cambridge Analytica and the company’s inability to halt the spread of toxic information from terrorism to self-harm — challenged her reputation.

The following text is a translation of an article Patrick Jenkins for the Financial Times on Medium.

It is therefore logical that when you start ambitious attempts to diversify in the area of Finance, the company decided to PR your project Libra as a generous attempt to end world poverty and usury.

Faithful to the history of self-aggrandizement and pseudopapillary of the claims of Facebook founder Mark Zuckerberg, were used for this policy document, the so – called “Wallpaper”. Six reminiscent of a political Manifesto positions, which begin with the words “we believe”, refers to “promoting financial inclusion” and develop a”global currency and financial infrastructure” as “the public good”. Sounds very impressive and in the spirit of Orwell.

The stated goal of Facebook, of course, laudable. It is absolutely right to criticize the high Commission of banks, creditors, currency-exchange companies and payment intermediaries for money transfers around the world. Here is also frequent fraud.

However, such a zealous Puritanism unconvincing. As in the case of any promises of a company with a market capitalization of 550 billion dollars and polzovatelya base of 2.4 billion people, and a mediocre history of reliability, there are good reasons to doubt her motives. Yes, established financial companies sometimes go to far with the inflated cost of services. But can you trust Facebook as a benign revolutionary?

Professor at new York University’s Scott Galloway thinks not and warns about the following.

First, control of the media… then control of the money… and then control over the army.

Will be a worrying sign to see the coin Facebook will become the world’s default currency, given the unanswered questions about accountability and control. Perhaps Zuckerberg in their t-shirts and sneakers are not similar to monster, but his creation could be the real Frankenstein.

Even if we accept the noble message at face value, it is doubtful whether achievable even remotely stated goal Facebook – cover 1.7 billion people worldwide are excluded at the moment from the financial system.

In wallpapere full of abstruse philosophy about what money really is, and about the technical magic of the secured cryptocurrency Libra. But Facebook clearly wants to be the greatest response found it philanthropic mission.

Financial inclusion is mentioned 7 times, the topic of confidentiality is one

If Facebook is a force for evil, the desire for “inclusion” is alarming. The company intends to stretch his legs more to 1.7 billion people, including by definition the most vulnerable population of the world.

Source: thenextweb

But even if the company acts in good – or at least not alonee any thirst for profits of the company, all the same there is a serious question. Can Facebook do to attach to financial Economics a significant number of disenfranchised people by giving them the ability to pay bills, to borrow or to insure his life? And here optimism runs into a barrier. The harsh reality is that three quarters of the almost 2 billion financial “limited” people do not have Internet access, according to the world Bank.

Overly optimistic to think that Facebook may just extend a good deed M-Pesa, the Kenyan mobile payment service. M-Pesa, which is owned by Vodafone focuses on mobile phones old model, and not on expensive smartphones supporting Facebook in developed countries.

See also: Jump on Bitcoin or a fatal mistake? What the experts think about cryptocurrency Facebook.

In many developing countries, broadband access to the Internet is rare. Although 4G networks are expanding, their coverage is still small by Western standards. Even in booming China, where Internet coverage is close to 60 percent, among the rural population – which accounts for a significant portion of people without Bank accounts – digital connection is not so common.

Another obstacle is the regulation. One of the reasons why Facebook focuses on financial inclusion is the need to appease politicians. Some regulators cautiously welcomed the initiative, while others threatened to “closely monitor”. Anyway, this does not mean that Libra will work as a tool for financial inclusion.

The poor have fewer opportunities to be able to prove your identity with a passport, permanent residence, utility bills and so on. In a world with increasing concerns of regulators over money laundering and customer identification is a big problem. In wallpapere Facebook describes the plan “pseudonymous” system based on the blockchain, which allows you to hide your real identity: it can be justified in the short term for relatively small cryptocurrency platforms, but not for a giant like Facebook.

Project Libra with all the hype around it seems, forcing regulators to understand the realities of the modern world and the need to adapt rules to new digital options Finance, from cryptocurrency to a wider payment industry. In this, at least, Facebook has provided the society a great service.

How do you feel about the project of the digital currency from Facebook? Whether Libra can help the adoption of cryptocurrencies in really damaging the industry? Share your thoughts in our cryptodata of hontarov.

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