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Libra – A Currency for the Unbanked (Part 2)

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Millions of people simply don’t have access to a bank account. These people form part of what is called the unbanked population. Other than keeping it under a mattress if you don’t have access to a bank, how do you keep your money safe?

Could the answer be on Facebook?

Banking on the Unbanked

Do you want to understand the potential that lies within Facebook’s initiative? Picture the most significant issue which most people have to deal with. A report by Business Insider reveals that as of August 2017, nearly two billion people around the world did not have access to a bank account.

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Source: Business Insider

To illustrate the scale of this problem, here are some stats of the unbanked population.

  • 20% receive salaries in the form of cash, while others pay for their bills and tuition fees in the same manner.
  • Women make up most of the unbanked population, around 55%.
  • SE Asia accounts for 73% of the unbanked – approximately 438 million people.

Moreover, according to a study by McKinsey, reaching out to the unbanked population in SE Asia will lead to an increase in economic contribution to $52 billion from $17 billion, by 2030. In fact, these figures could be the main reason why Facebook is targeting India and its 190 million unbanked population.

So, how does Facebook plan to tap into this forgotten part of the world?

Banking on Blockchain – Facebook’s Plan

You’ve heard this a million times before, we’re in the digital age. Libra’s whitepaper recognizes the impact the internet and mobile broadband has had in empowering people.

For starters, billions of people from around the world now have access to world-class knowledge and information.

To illustrate the impact technological advances have had, here are some figures:

  • As of 2018, the number of mobile phone users grew by four percent year-on-year, to more than five billion people.
  • By 2018, internet users increased by seven percent year-on-year, to more than four billion people.
  • As of 2018, social media users were more than three billion people, up 13 percent year-on-year.
  • Four billion of the world’s internet users collectively spent over one billion years online by 2018.
  • Above all, Facebook alone boasts of over two billion monthly active users.
  • India has the largest population on Facebook – more than 270 million users, ahead of the US with over 210 million users.

The Bottom Line

In essence, this is where Facebook is planning its most significant impact. Unlike other cryptocurrency projects, Facebook’s Libra comes onto the scene with an already established user-base. As such, Facebook can leverage its more than two billion monthly users to push for Libra adoption, thereby driving crypto to mainstream adoption. Only 2.5 million people own any amount of bitcoin. If Facebook can get even a small percentage of their userbase to use Libra, it could be a catalyst for cryptocurrency’s wide-scale use.

Last modified: October 16, 2019

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