Although it is unlikely to be recognized as a country by the United Nations, it didn’t take long after the official announcement of Libra that three countries, France, England, and Germany, started feeling threatened. Specifically, France’s Finance Minister has stated unequivocally that the Libra cannot be a replacement for sovereign currencies.
Before we go further, I need to state that in my view, Libra will highly probably be a success and gain quick traction given not only the number of users across Facebook and WhatsApp but also partner companies such Visa, Mastercard, Uber, Spotify, Lyft, and more who will each form part of the Libra Association and investing $10 million each in the project which is set to launch in 2020. More importantly, I can see Libra (as is hinted in the marketing documentation so far) gaining traction in developing markets such as Africa given how it promises not only to make it easier to receive, send and spend money but also achieve something many financial inclusion projects have been struggling with, lower transaction fees.
As far as why I now think this completes the idea of Facebook becoming a country, it’s simply because of the leverage it will hold over some countries especially across the continent who not only do not have near as accurate data about their citizens like Facebook has, but are struggling to maintain the value and usefulness of their own sovereign currencies (e.g. Zimbabwe). At the heart of it (Libra) people just want a quicker and cheaper way to transact and send money, and already in Africa, many are used to using mobile money for their daily living. With a network of partners like Uber and likely more to be added (Facebook makes mention of a Libra marketplace) it is really hard to see Libra failing, despite even some of us being skeptical as far as Facebook’s privacy promises are concerned.
Apart from having such a huge population and now a currency, Facebook also does not fall under any single country’s jurisdiction. For example, its US-based users are governed by a corporation registered in the USA, its users in the rest of the world are governed by a corporation registered in Ireland, while in China it works under different laws. This not only applies to laws but where it pays taxes too. So, as such, you cannot exactly call it a US company as it is not bound any single country’s laws and to make matters worse (or good if you’re Facebook) it is a virtual entity.
It really, in my view, has officially become the People’s Republic of Facebook (and like its namesake, its not a democracy 😊)
Is this good or bad?
I don’t know. All that matters is that we should probably expect more of this (hint: Amazon