Commentary

Dear Zuck, We Already Have Money -- We Don't Need Librarating

It never ceases to amaze me how many people try to reinvent something that works perfectly well. The best example? Money.

A great example of where this leads is Facebook signalling it is climbing downand will now not launch Libra as a cryptocurrency. Instead, it will launch as multiple digital versions of existing currencies. No, I'm not too sure what that means either, or at least I don't get the point.

Log on to your banking app and you will find there is money available in digital form already. Open up your Apple Wallet and you can use that digital money to buy a coffee and get on the tube. If we're talking a large purchase, you can do the same, only with a PIN being required

The system works and why on earth Facebook thought a new form of money was needed is beyond me.

Why on earth they thought the public would trust Facebook to be the central partner of the Libra movement is also beyond me. The apparent surprise the tech giant has shown in discovering regulators have told it to think again is yet another surprise. 

The same is true of local pound schemes that started up around the country over the past few years. They seemed like a great idea. A Bristol Pound, for example, could only be spent in Bristol. That meant the money would become "sticky" and prompt people to shop locally. The problem is that it just doesn't work.

Retailers can't do anything with the notes they have received other than pay their electricity bill or business rates. The money ends up being "sticky" as it finds itself stuck with the local energy company and council.

I was talking recently to the person who set up, and is now closing, the Exeter Pound. He was refreshingly honest that the schemes that have set up and are now either closed, or facing up to possible closure, all face the same problem. When a grant to launch a project dries up, you then need the retailers to pay to accept money they have no need nor use for.

At the same time, nobody pays with cash anymore, so you need to try to make your money contactless. That costs a lot of money, requires regulatory hurdles to be overcome and needs a lot of skills that volunteers just don't have.

It's a tale that Mark Zuckerberg would do well to learn. We already have money -- it has been invented and everyone uses it without any real problem.

Yes, there are many unbanked people around the world, but as they get mobile phones they are beginning to use banking apps. Guess what -- these apps use the currency of the country they are based in. They don't need a cryptocurrency to operate.

Just as I've always suspected I wasn't the only one scratching my head with local pounds schemes and asking, couldn't you just have a "shop local" campaign, I now know for sure I wasn't the only one who thought Zuckerberg operating a cryptocurrency was a crazy idea.

Nobody would trust it and nobody would need it. Get ready for some sort of pivot into it being a Facebook wallet that competes against rivals from Apple and Google.

Get ready for it to be a complete failure that soon will never be spoken of again. 

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