Windows Help & Advice - USA (2019-11)

© LIBRA PROMOTIONAL VIDEO

Sending money home

A stated early target for users of Libra is the migrant worker

who sends money home to support their family. While the

individual amounts may not be large, the scale of the whole

business is huge. The World Bank estimates that $715 billion is

moved around the world annually, supporting over 800

million people, and making major contributions to the

economies of many nations.

The established wire transfer services, such as Western

Union, take a cut of this. The global average for transfer fees

is 7 percent, which is quite a hit: seven pounds for every

hundred of hard-earned wages disappear when you simply

send money home. There are currently few ways to avoid

these fees, and they have a disproportional effect on wealth.

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Cultural Organization)hascalledforthistobereducedtoa

maximum ofthreepercenttoaidthedevelopingworld.

The infrastructureLibraneedsis in alreadyplace– theuse

of smartphonesis high,evenin countriesthatlackotherbasic

services. It’s notunusualformorepeopletohave

smartphonesthanhaveaccesstoa bankaccount.A quickbit

of math alsoshowswhythisis sucha temptingprojectfor

Libra. If Facebookmanagestocapturehalfofthemarket,and

charges a morereasonable2.5percent,thatequatestonearly

$9 billion a year.Thisis onereasonwhyit hadbeenplanned

to launch Librain countriessuchasIndiaearly,althoughthis

has hit a regulatoryroadblockfornow.Offeringfreeor

low-fee moneytransfersis alsoanexcellentwaytoget

Facebook intoemergingforeignmarkets.

The Libra Association is

keen to stres s it s use for

sending small amounts

of money internationally.

itself. About five percent of

all active Facebook accounts

are fake. Earlier this year,

Facebook attempted a

clear-out, and deleted a

staggering 2.19 billion

accounts. Although many

were profiles and removed

at the point of creation, it is

still an alarming number.

Facebook will have to get

much better at identifying

and removing fake Libra

pages and ads.

It has been here before,

too – there were so many

scams involving

cryptocurrencies that it

banned all ads for them in

January last year. It relaxed

the rules a little this spring,

allowing related products

and services to be

promoted, but you still

can’t sell cryptocurrencies or

ICOs (initial coin offerings)

on Facebook.

Can it go wrong?

That is a frightening, if

unnecessarily pessimistic,

prospect. If it did start to

wobble, who would bail it

out? No government is

under any obligation to do

so. Some doom-mongers

say Facebook is at risk of

developing a system that

is too big to fail, but is

decentralised to the point

where there is nobody

obliged to catch it if it

does. Thereislittleneed

to worry unduly,though

• Facebookwillhavedone
  its researchthoroughly,
  and the projectisclearly
  well funded,andhasa
  powerful groupofbackers.
  Libra is goingtobebig.
  It is also goingtohurtthe
  core businessofmany
  large international
  organisations,assuch
  disruptive technologyhasa
  habit of doing.However,it is
  also almostinevitable.If not
  Facebook, thensomebody
  else, and Libraisunlikelyto
  have the markettoitselffor
  long either.
  Ready ornot,such
  currencies arecoming.

Librashouldbereadyto

launchnextyear,although

exactlywhereandwhat

serviceit willinitiallyoffer

isunclear.

Inthemeantime,there

isgoingtobea gooddeal

ofsortingout,asthe

regulatorsandFacebook

bargainoverexactlyhow

Libraistoberegulatedand

implemented.Ina fewyears,

wewillprobablybe

wonderingwhatallthefuss

wasabout.

Thebasicideaissolid,

practical,andgenuinely

useful:a stableworld

currencydesignedfrom

theoutsettobeusedin

a digitalworld.

Technolog

Facebook Libr

November 2019 | |^63