What really is the motivation for Facebook in attempting to be the arbitrator of financial inclusion on a global scale?
The claimed objectives are financial inclusion, and lowering the costs of doing finances in general. However in the past have these kinds of goals of inclusion and reaching into the developing world by Facebook been driven by altruism or by something else? Facebook says "our intentions are really to solve problems." But has this historically been the case with Facebook and Mark Zuckerberg, at all?
Facebook claims it wants to "really lower the bar for accessibility to a modern financial system." But what does it mean by modern financial system? What is the definition of a modern financial system in Facebook's view? According to Facebook and the Diem Association (the name was previously Libra, now Diem), the modern financial system would be one global Diem-coin blockchain-powered one, governed by the Diem Association. Diem Coins aim to be the new global currency, as according to Facebook: "when you need to" use your local coins you can use its single-currency "stablecoin" or its multi-currency local "stablecoin".
What would be the benefit of Facebook slowly rolling out this new currency globally for its billions of users to use?
Inputmag.com gives some idea: "The company will offer payments services to merchants and charge a fee when users purchase goods. By moving away from traditional banking, Facebook won’t have to pay a fee to the Visas and Mastercards of the world. It will take the fees for itself. That’s not exactly altruistic."
Seekingalpha.com also chimes in: "The Diem Association is made up of 26 companies including Uber, Lyft, Shopify, and Spotify. Through this association, Facebook can expand the potential of the Diem beyond its own platform into the platforms and services offered by companies in its association. Because almost everybody either has any of Facebook's platforms or uses services from any of the companies in the Diem Association, the profit potential and use cases for Diem are significant. "
Facebook says it is working with a "trust deficit", in regards to the Diem initiative, and that is a huge understatement.
Besides the huge issues it faces politically and its advertising issues, historically its forays into inclusion and into the developing world haven't gone well at all. How did Facebook's "Free Basics" program go? With "Free Basics" Facebook wanted to be "The Internet" for the developing world. "Free Basics, Facebook’s free, limited internet service for developing markets, is neither serving local needs nor achieving its objective of bringing people online for the first time."
“Gradually, we realized that [what] Facebook was looking for was not necessarily to connect the world, but to see how they can capture more of the market in the name of connectivity, and to connect people on their own platform,” said Osama Manzar, founder of the nonprofit Digital Empowerment Foundation in New Delhi"
Since then, and similar in fashion of going from Libra to Diem, Facebook has rebranded its "Free Basics" program to be called Facebook Discover, which has been further studied only to find similar criticisms.
Before Diem can be rolled out to a global audience, Facebook wants to launch its digital wallet first, called Novi, as soon as the end of the year 2021, where Novi will integrate with WhatsApp, Facebook, Messenger, as well as be a standalone app. On the Novi.com website, it states that "Diem is a new global payment system." and "Over time, additional merchant services will help businesses big and small accept Diem online, in-app, and in-store." and "Over time, the Diem payment system intends to support additional digital currencies." presumably to obtain income from both merchants, big and small business, and through the trading of additional cryptocurrencies.
It's not just Facebook that has audacious ambitions to usher in the sole currency of the world. It's Twitter too, although they aren't creating their own currency.
Twitter's CEO Jack Dorsey has similar goals for Twitter and his other company Square, as well as through his new subsidiary of Square. Jack Dorsey has recently gone on to state that if he were not working at Square or Twitter that he would be working on Bitcoin. He is a huge advocate for Bitcoin as he has announced that Square was to begin work on a hardware cryptocurrency wallet. Rumors of leaked screenshots and other news reports circled that Twitter had added new code in a beta update that allows Bitcoin cryptocurrency. "Twitter reportedly inserted the relevant code in a recent beta update, so BTC tipping could make its way to the platform sooner than later, potentially, for beta users."
"Jack Dorsey has expressed that the leading cryptocurrency, Bitcoin, will be key to Twitter's future-will continue to live on and be used in the platform. Several features from Twitter would soon be associated with Bitcoin and they would be in the form of Super Follow and the Tip Jar. " In Square's own terms, it states that it wants to "facilitate the financing of a non-custodial wallet anywhere in the world through a platform to build entry and exit ramps in bitcoin" -Square.
How do Twitter and Facebook users feel about all this?
As Jack Dorsey is orchestrating Bitcoin to be the one global currency through the network effects of Twitter, Facebook is aiming to do a similar maneuver with their own Diem currency.
What say does the average citizen have in these new global currency pushes?
Tags: facebook twitter fb tw diem crypto cryptocurrency blockchain stablecoin bitcoin money economy finance finances social media social global currency payments whatsapp messenger instagram square jack dorsey mark zuckerberg developing world free basics facebook discover libra diem association financial inclusion profit profit potential network effects coins business