Libra…… everyone in our community is talking about it. Some enthusiastic for the changes it could bring, others sceptical about how it will impact on financial inclusion, and others concerned about regulation and data privacy.
In our exclusive webinar, DFI’s three founders, Gavin Krugel, David Porteous and Ignacio Mas discuss what we know about Libra so far, and what the future may look like.
Gavin leads a discussion about Libra’s potential to disrupt the payments system and Libra’s advantage of having a direct relationship with 2.3 billion account holders, including 90 million merchants. Gavin feels that Libra business case is in commerce, rather than international remittances, and an advantage will be the near free price for end users to transact.
David discusses the challenges around regulating a global currency, the role of the Libra Association and data privacy concerns, and highlights the main concern for regulators is the unknown effect that Libra will have. David feels that Libra needs to get some form of endorsement from a Central Bank, potentially Switzerland where the association is based.
Ignacio asked the question whether Libra will make a disruptive and positive impact on financial inclusion. He raised that issue that Libra needs permission, you need to be signed up to a financial institution to process your transaction, which could bring the same challenges as opening bank accounts depending on regulations, such as KYC for example. For domestic transactions and savings there will be an exchange rate risk, which means it is unlikely that many people will use Libra on a day-to-day basis.
There is agreement between our founders and those who joined the webinar that there is potential here for disruption and to encourage innovation in the space, but we need more information, such as how the blockchain will operate, to understand what impact, if any, Libra will have on financial inclusion.