According to The Wall Street Journal, Facebook’s ambitious goal for its new cryptocurrency Libra is to bring financial services to hundreds of millions of people worldwide who don’t use banks for financial institutions at all.
Cryptocurrencies have been trying for years to do just that, but people still aren’t using them for daily transactions, so the reach of these cryptocurrencies is limited. Around 1.7 billion adults around the world don’t have any kind of bank account, according to the World Bank. Getting people to use a currency in daily life requires a strong infrastructure, easy accessibility, common adoptions, and government correspondence.
Libra’s big advantage is that it is backed by the largest social network in the world with over 2 billion users. Having such a large pool of customers that frequently use the platform and could use Libra on that same platform is a huge bonus for Libra.
Adalberto Flores, the chief executive of Kueski, a Guadalajara, Mexico-based financial-services startup, says about these unbanked users at Facebook, “You have this vicious cycle in which people are barely surviving, they can’t afford taxes, don’t want to use bank accounts, and because of that, accept only cash.”