There was a time when business was wary of big government.
It is the other way around now.
Today Facebook announced that it would launch its own digital coin next year, a potentially revolutionary step that will allow 2.4 billion users to make payments over its network.
This promises to crack open one of the most over regulated industries in the world.
Doing so with its own private global currency, Facebook will allow users to convert from dollars, pounds and other international currencies into this crypto currency called Libra and vice versa.
The coins can be used for all in nature of commerce on the Internet in physical locations and transferring money without needing a bank account.
This crypto currency, being developed in Switzerland is backed by network such as Visa, MasterCard and PayPal.
Others in the ecosystem include Uber, Spotify, eBay, Vodafone amongst a total of 28 companies that are reported to have signed up.
Crypto currency is a been around for a decade now. Bitcoin was created decade ago and several other minor crypto currencies followed but their summative impact seems fairly marginal.
Estimates of the numbers using Bitcoin do not exceed 20–25 million people.
Facebook however is on a completely different scale. Besides 2.3 billion users , Whatsaspp has another 1.5 billion. This user base along with a market value of $500 billion gives Facebook the muscle mass needed.
If Libra becomes the currency used by everyday people it will be an irreversible phenomenon. Despite all its other troubles the market is anticipating this huge breakthrough and Facebook share today stands at $ 180 compared to the $140 at the start of the year.
It will immediately impact traditional banking. Across the world regilar banks are grappling with ineffective scale, poor legacy technology, weak unemotional branding and ‘low-tech – high touch’ structures.
Their liquidity comes in via the current and savings accounts. Once that is gone , traditional banking will be gone too.
It will also massively erode the power of governments, central banks and monetary sovereignty.
Once a currency has 2–3 billion users across the world no single government or currency can dislodge it.
This is an idea that potentially impacts commerce, governance and democracy as we know it.
And it is inevitable whether done by Facebook,Amazon or Apple.