The co-creator of Facebook’s recently announced cryptocurrency, Libra, said the currency was created to help the unbanked population easily access the financial system, according to a Facebook post he wrote on Wednesday (July 3).
David Marcus’ post, titled “Libra, 2 weeks in,” covers a range of topics, especially financial inclusion.
“With Libra, anyone with a $40 smartphone and connectivity will have the ability to securely safeguard their assets, access the world economy, transact at a much lower cost and, over time, access a whole range of financial services,” he wrote. “We firmly believe that if Libra is successful, it can be a non-linear step change for billions of people who need it the most.”
Marcus explained that some analysts think the reason people are unbanked is that they simply don’t have enough money. He believes the real reason is that bank accounts are based on the notion that consumers must keep a certain threshold of money, and if they go below that threshold, they are charged fees. The fees, he said, are what most people can’t afford.
“The very people who say they lack the money to open a bank account are actually not saying they have no use for modern financial services,” he wrote. “They’re just saying they can’t afford to access the system, so they remain on the fringes and are forced to use services that charge exorbitant fees and rates.”
Marcus also addressed the spate of reports regarding regulators and legislators in countries all over the world who are concerned about Libra’s implications for the financial system as a whole.
“... we believe in and are committed to a collaborative process with regulators, central banks and lawmakers to ensure that Libra helps with the kinds of issues that the existing financial system has been fighting, notably around money laundering, terrorism financing and more,” he wrote.
Marcus also said that moving to a digital network will help to monitor financial crimes and enforce laws if the right safeguards are put into place. He reiterated that Facebook will be just one of more than 100 members of the Libra Association, which will oversee the currency.
“We will not have any special rights or privileges. Facebook created a subsidiary — Calibra — that will operate a wallet service on top of the Libra Network, and while Facebook, Inc. owns and controls Calibra, it won’t see financial data from Calibra,” he wrote.