Libra and governments, who’s going to win?
Facebook has shaken up governments around the world with the Libra project which, despite the many difficulties, does not stop: there are already 21 organizations that have signed the Libra Association including Vodafone, Uber and PayU.
Since Facebook officially unveiled the release of its cryptocurrency Libra, it has faced an outburst of criticism, with regulators and central banks raising concerns about potential threats, from data privacy to financial stability and even monetary policy, given the size and scope of the company.
In October 2019 France, Germany, Spain and Italy even formed an anti-Libra coalition to prevent the development of the project in Europe. During the same month, some of the founding members of the Libra Association, including eBay, Mastercard and Stripe, abandoned the project due to regulatory problems.
Last November, Facebook Pay, a payment system that allows Facebook users in certain regions to make payments via Instagram, WhatsApp and Messenger, was launched.
However, Facebook Pay is not a white flag and will not replace the Libra project. Facebook, in response to the walls put up by European and international governments, has readjusted its initial project, deciding to add digital currencies issued by governments such as the euro and the dollar to the cryptos supported by Calibra.
According to this new plan, Facebook expects to release Calibra and Libra simultaneously, probably in October.
What would happen if 2.4 billion users were able to use Libra for any type of payment? Is the era of material payments over?
Neobanks and digital banks, who’s going to win?
In the Fintech sector of certain countries like Australia, Neobanks are taking hold, a bank concept that has been around since 2017.
A Neobank differs from a traditional bank mainly in that each service and every aspect of it is 100% digital.
It is not possible to visit a neobank branch, neobanks only exist in dedicated apps or their websites. A neobank offers highly convenient options, but the lack of a physical location creates a disadvantage for neobanks on a human and personal level. Neobanks integrate this lack with the development of Artificial Intelligence, applied to the traceability of transactions and the personalisation of the customer experience.
Another term that often causes confusion is “Digital bank”. A digital bank is merely the online “branch” of a large traditional bank, while a neobank is an exclusively digital entity, which is not associated with any traditional financial institution. This implies that neobanks often offer more advanced services through the application of new technologies, but also that they may be lacking in the financial services that digital banks benefit from.
Will the rise of these new entities promote the widespread use of digital payments? Will neobanks be defeated by the big digitized banks in the race for new technologies?
A return to privacy or its definitive disappearance?
The issue of privacy has become one of the most discussed issues in recent years, especially after the Facebook scandal with Cambridge Analytica.
People are looking for solutions to maintain at least a partial form of online anonymity. It’s no coincidence that the new popstars of 2019 are Monero, Dash and Zcash, all 3 privacy-oriented cryptocurrencies.
This growing popularity is also attracting the attention of regulators. If in 2019 stablecoins were their main obstacle, privacy coin will be the protagonists of 2020. Privacy is particularly difficult to reconcile with government demands, offering such a level of anonymity that it is difficult to regulate. These cryptocurrencies can hide transactions, making it more difficult for exchanges and users to comply with new international guidelines to prevent money laundering.
Some exchanges such as Coinbase are taking privacy coin away precisely to comply with local regulations.
Will privacy coins achieve disruptive popularity because they meet the anonymity needs of users or will they have to adapt to regulations that will soon come into force?