🔴 Facebook’s New Business Model – Libra (w/Jalak Jobanputra)

🔴 Facebook’s New Business Model – Libra (w/Jalak Jobanputra)

So talking about tokenization taking hold What are your thoughts on? Facebook’s new Crypto point I don’t even know if it’s fair to call it a crypto coin because it isn’t completely decentralized in many ways There’s still a lot of details to be determined here on What? What is decentralized what’s centralized what we do know as of now is that they’ve gotten a consortium of partners together? Which includes some of their advertising partners companies like Spotify? companies from the financial services sector like PayPal Visa MasterCard, which are very Interesting because you could argue that they’re competitors for payments mindshare and usage But they’ve gathered together a group of companies – I believe make it look and appear to be not so centralized that they’re actually creating a new entity that all these Consortium members will participate in and kind of govern this new Currency this this Libra coin as they’re calling it as of now and so Facebook will be just one of the nodes and that in that network and eventually I believe they want to get to a hundred members In this network, they’ve all put in ten million dollars committed – ten million dollars apiece There are also some nonprofit partners such as Women’s World banking So they’re very much looking to make this appear to be a really global effort focused on kind of banking the the 1.7 billion people around the world that are currently unbanked What I find it really interesting about this too is if you look at Facebook’s Financials only 10% of their users come from the United States 70% are in the emerging markets and developing markets however, most of their revenue almost a hundred percent of their revenue comes from advertising and its Advertising from those in the developed markets so they’re under a lot of pressure if they want to keep growing to figure out a new business model and We’re seeing companies around the world Want to get into the banking sector I’ve been investing in FinTech before it was confident acumen in the mid 90s late 90s and Controlling that spend or being able to participate in some of the fees is I think what they’re looking at as their next business Model it’s very early days. It’s going to take a long time to transition over to that But I think that’s very much what they’re going for So Facebook has been facing a lot of scrutiny because of its data collection and also the amount of information that has on users and also Potentially the lack of regulation that it faces right now Do you think them getting into this space? Without they’re able to do it because they’re not becoming a bank in a way Do you think that actually puts a lot more pressure on them in some way or more scrutiny? Well, I think the way they structured this shows that they’re very aware of the potential scrutiny Around this and and why they focused on on putting together this separate entity in Switzerland Which is a more neutral place. They’re also have more crypto friendly regulations in switzerland That’s where ethereum was was first launched under a foundation model, which is what facebook is following And so this is basically an LLC that they created both an LLC and the plan is to create a foundation the Libre Foundation where all of these consortium members will be members of that foundation. They’ve also created a separate LLC Which is going to actually run one of the nodes in in this foundation And they’re actually going to create the wallet that the Facebook users Will interact with so if I want to send money through my messenger app, I could do it through a third-party Blockchain crypto wallet or I can do it through Facebook’s wallets. So that’s where they’re going to start collecting Information on on their users and go through the standard Kyc process that banks actually require. I’m curious to find out what you think This is going to do for the crypto space Then also what this is going to do for the US dollar in the sense that is this actually more of a competitor Against the dollar than it is. Let’s say against Bitcoin well, I view all kryptos as Eventually taking some mindshare away from fiat I’ve never been one of those people who believes that you know bitcoin is going to take over the world, but if you give people alternatives in terms of Transacting and and this could be government’s or it could be the individual There’s going to be less reliance on the US dollar. So you’re already seeing countries look at issuing their own Sovereign digital currency you’re starting to see trade regions Exploring that and a lot of it I think is motivated by decreasing reliance on any one currency or any one standard and right now it’s really the US dollar and So so I do believe any alternatives in terms of payments are potentially a threat to fiat currency in general I mean we’re moving towards cashless societies all over the world if we look at what happened in China with with WeChat China had the most unbanked people in the world. Most of these unbanked are In in in the developing markets you look at India and Africa Those countries have the youngest populations the most people that are going to enter into the global GDP And and they don’t have banks the way we know them. They don’t have credit cards so this is a prime time if you look at the macro perspective and if you care about GDP growth their needs there need to be alternatives to the institution’s we built in the twentieth century I don’t think they’re going away, but there’s going to be more competition Do you see this potentially getting people more into other crypto currencies or do you see this is a kind of walled off situation Well, I think the fact that I looked at my LinkedIn Feed and there were so many people talking about it who have not commented on cryptocurrency or blockchain before I? think it’s really captured the attention of people who Than in the space and I think that’s a good thing at the end of the day Facebook has over two and a half billion users around the world 70% of them are in these emerging markets right for crypto and and blockchain Technology to realize its full potential We we need to have broader awareness a better user interfaces right now It’s so challenging to go out and buy I mean bitcoins a little bit easier but if it’s still if you want to buy other Kryptos You have to go through a long process if you want to hold your own keys and and control your Crypto currencies it it’s you have to remember a long seed phrase and so I Very much as we’re in 1995 internet and I was lucky enough to be Involved in those early days. And and so the parallels are very obvious to me and we didn’t have the e-commerce You know secured secure ways of buying things online We didn’t have the broadband connectivity that we have now We didn’t have the mobile connectivity which has brought all these billions more people online around the world and and so we’re kind of in that phase with with crypto and I Can’t think of a better way to kick-start awareness Around what cryptocurrency is and even if this is just a derivative or one form of it? Making people more aware of what this technology can do. It can create faster payments rails more seamless transfers You can program it in a way that you know Facebook could offer discounts on advertising to thier partners and there’s so many new business models that can be created out of crypto and blockchain technology And I don’t think we’ve even started tapping into near the potential because we’re not seeing that usage yet. Do you see any? Potential risks from Facebook getting into this space is there Fallout of maybe they don’t do it right And there is a lot of scrutiny and then that maybe pushes people to stay away from other crypto currencies for a while That that’s quite possible. I think we already are a little bit skeptical about Facebook in the way. They handle user privacy and and data and and so I take a contrary and approach to this where I want to see them try this and and and gonna Have people ask those questions about privacy about their writing their own smart contract language Why are they doing that? Well, how’s the governance going to work on validating the transactions? How are the partners? What data are the partners going to see if any? with Facebook’s own wallet if people are using that to transact what data will Facebook actually control they’ve said they’ll allow opt Or or it will be an opt-in structure Which is very much against what they’ve done before which is you have to opt out. Most people don’t opt out of things because They don’t read the privacy So I hope people kind of hold them to what they’re saying and and and take a look under the hood as we get more and more details around all these pieces But I think it can educate a broader swath of the population on What this can do and and and we will have discussions on privacy around all of this Do you envision a future where different companies have their own coins? We have a soft Bank coin and a Twitter Queen and different things or do you see it as being a very limited space? for companies to get into this area Well, I mean in some ways we we’ve had coins in the form of like loyalty points and you know It’s just we haven’t really been able to use them out outside of a company’s four walls, man And what will be very interesting to see with with this Facebook announcement is how are their partners going to get engaged? so they’ve said you can potentially use the these Libra coins at a retailer or You know on another site and so it’s that Interoperable piece and and then how are you going to get? How you’re going to cash out on that if you want to cash out on fiat And and so I I think this consortium idea and getting some of these folks involved it’s it’s the first time we’re also seeing something go beyond just the the four walls of a company and And see what they can do with partners. I I think we’re still in very early days there But there’s a lot of potential. I just hope they’re able to execute You


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