Earlier today, Nairametrics reported that Facebook is working towards unveiling its digital currency come 2020. The cryptocurrency is called Libra.
Reacting to this development, Financial Expert, Kalu Aja, took to his Twitter page to explain what this situation means for the Nigerian financial sector; specifically Central Bank of Nigeria and the other commercial banks in the country.
According to Aja, Facebook‘s Libra should be a source of worry for the CBN because following its eventual launch, Nigerians can easily send and receive money from anywhere in the world all while using their Messenger and Whatsapp apps.
Read on to find out why exactly (in Kalu’s view), Nigerian financial institutions should be worried about this latest development.
We finally
get the first glimpse of Facebooks cryptocurrency called Libra.Libra will allow uses send currency the same way they send a Facebook message, little to zero fees, anonymously and safely.
What are the implications?
Lets explore
( below is Libra symbol) pic.twitter.com/vnGFcJzph7
— Financial Planning (@FinPlanKaluAja) June 18, 2019
Central Banks: If I were the CBN Governor, I will be worried. Potentially $ remittances could be sent via Libra, bypassing domiciliary accounts and Money Transfer like Western Union. Loss of revenues to Government is a clear threat here.
Commercial Banks: Would not be out of place for banks to scenario-plan what will happen if cash is sucked out of Domiciliary accounts to Libra. An importer can simply open a cryptocurrency wallet buy libra and pay for import, no more bank fees.
Consumers: Finally a money transfer service that is really affordable. “Emeka” can send libra from Germany to Nimo village directly in a currency pegged to US dollars …just like that He can send $1or $100, no bank visit required. He can even pay $10k to Xi in Guangzhou.
Money Transfer Services: Like Western Union and others? Good night.
Entrepreneurs: Just imagine how this changes everything. There will be a secondary market where folks will buy Libra from “Emeka’s mum” and resell to Importers Everyone will become a “bank”. Even Ajo will start to collect in Libra.. Imagine!
Financial Inclusion Biggest winner: Simply put, if you have a phone, you can receive even $1 a day from your son in Canada. Every grandma and wife will adopt mobile banking, thereby increasing inclusion. Think about it, $1 a day sent, low fees no “English”.
In closing: Facebook has done its homework. Libra is owned by a consortium. Libra is pegged to a basket of currencies including Dollar, Euro Yen… Call your team, formulate your Libra strategy; how will you navigate and get a piece of this? Fortune Favours the Prepared
PS: Now you know why Facebook wants to give Nigeria “free” access.