Facebook’s High-risk, High-reward Crypto-gambit

Facebook’s High-risk, High-reward Crypto-gambit

Facebook unveiled plans for a new cryptocurrency and payment system on Tuesday. It's called the Libra, and it's not-so-modest goal is to "reinvent money," and "transform the global economy" so that "people everywhere can live better lives." Ambitious much, Zuck?

This is a huge political gamble, but the rewards could be enormous. Here's a quick look at the tradeoffs:

The risks: Facebook is asking its 2.5 billion users — and government regulators — to entrust it with something that's vitally important to people everywhere and a power that governments jealously protect: access to money. And it's doing so at a time when trust in Facebook and other big Silicon Valley companies is at a low ebb.

Whether it's a concern that Big Tech has become too powerful or that it's not doing enough to protect privacy or put a stop to fake news, it's a heck of a time to launch a new techno-utopian project that could give Silicon Valley much more power — including the ability to track not just what people say they like but how they spend their money.

Mark Zuckerberg understands this — the Facebook founder is setting up Libra as a Swiss-based non-profit that will be governed by an "association" of 28 tech and financial companies and non-profits of which Facebook is just one member. He's also promising that Facebook will not mix personal data with payment information, and to cooperate with regulators.

But this will always be Zuckerberg's baby, and by launching Libra, he's painting a big new political bullseye on his own back.

The payoff: If Libra can survive the inevitable political and regulatory storm (and convince its billions of users that they can trust the underlying technology and financial stability of the new cryptocurrency) the upside could be enormous.

How enormous? The Libra website claims that more than 30 percent of the world's population — about 1.7 billion people — currently lack access to traditional bank accounts. Many more pay steep fees to transfer money using traditional payment services. Libra, by contrast, promises access to anyone in the world with a simple smartphone — and to make payments as inexpensive as sending a text message.

Plug those capabilities into a social network whose user base is roughly double the population of the biggest country in the world, and the results could be revolutionary — not just for billions of people who would gain new access to financial resources, but for Facebook's business model, and for central banks and governments that have traditionally sought to control the flow of money through their economies.

That would be a techno-utopian dream come true, but it's a power that governments won't willingly surrender.

Yau Abdul Karim lives and works in Garin Mai Jalah, located in the Yobe State of northeastern Nigeria. Essential to his work raising cattle is reliable access to water, yet environmental degradation has led to fewer water sources, severely impacting communities like his that depend on livestock. In 2019, with the help of FAO, Eni installed a special solar-powered well in Yau's town that provides water during the day as well as light at night.

Watch Yau's story as he shows how his family and community enjoy life-enhancing access to both water and light.

Ian Bremmer's Quick Take:

Hi, everybody. Ian Bremmer here. And I thought I'd talk a little bit today about the latest in Israel, Palestine. It's obviously been driving headlines all week. And of course, on social media, there's no topic that we all get along and agree with each other more than Israel, Palestine. It's an easy one to take on. Yeah, I know I'm completely full of crap on that. But I thought I would give you some sense of what I think is actually happening where we're going. So first point, massive fight, big conflict between Hamas in Gaza and the Israeli defense forces. Not only that, but also more violence and a lot of violence breaking out between Israeli Arabs and Israeli Jews. Extremists on both sides taking to the streets and fairly indiscriminate violence, in this case, worst since 2014.

More Show less

Nicola Sturgeon, Scotland's first minister, says another independence referendum for Scotland is now a matter of "when not if," and that after leaving the UK, Scotland will launch a bid to rejoin the EU. But there are formidable obstacles ahead.

Getting to a vote will force a complex game of chicken with UK Prime Minister Boris Johnson. If a majority of Scots then vote for independence — hardly a sure thing – the process of extricating their new country from the UK will make Brexit look easy. Next, come the challenges of EU accession. In other words, Scotland's journey down the rocky road ahead has only just begun.

More Show less

Cyber is a tool, and sometimes a weapon. Whether espionage for commercial gain or indiscriminate attacks on critical infrastructure, actions taken in cyber space affect you directly, potentially upending even the most mundane realities of everyday life.

Join GZERO Media and Microsoft for a live conversation on cyber challenges facing governments, companies, and citizens in a Munich Security Conference "Road to Munich" event on Tuesday, May 18.

More Show less

Get insights on the latest news in US politics from Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington:

Who is Elise Stefanik and what does she mean for the Republican Party right now?

Elise Stefanik is a young member from Upstate New York. She had originally started her career as a staffer in the George W. Bush administration, but in recent years, has turned into one of the most outspoken defenders of President Donald Trump, particularly during the impeachment trial last year. She's relevant right now because it looks like she'll be replacing Liz Cheney, the Representative from Wyoming and also the daughter of the former Vice President, who has been outspoken in her criticism of President Trump since the January 6th insurrection, and probably more importantly, outspoken in her criticism of the direction of the Republican Party.

More Show less

According to Delhi-based journalist Barkha Dutt, while the Indian government has finally started to mobilize in response to the COVID crisis, there's still a lot of denial about the severity of the ourbreak. "Our Health Minister, for instance, made a statement in the last 24 hours saying that India is better equipped to fight COVID in 2021 than in 2020. That's simply rubbish. We had India's Solicitor General telling the Supreme Court that there is no oxygen deficit as of now. That's simply not true." In an interview on GZERO World, Dutt tells Ian Bremmer that only the connection between fellow Indians, helping each other when the government cannot, has been a salve.

Watch the episode: India's COVID calamity

Listen: Ask national security experts how they view China today and they'll likely the use a term like "adversary" or "economic competitor." But what about "enemy?" How close is the world to all-out-war breaking out between United States and China? According to US Admiral James Stavridis (Ret.), who served as Supreme Allied Commander to NATO, those odds are higher than many would like to admit. In fact, Stavridis says, the US risks losing its military dominance in the coming years to China. And if push comes to shove in a military conflict, it's not entirely clear who would prevail. Admiral Stavridis discusses his bestselling new military thriller 2034 and makes the case for why his fictional depiction of a US-China war could easily become reality.

Subscribe to the GZERO World Podcast on Apple Podcasts, Spotify, Stitcher, or your preferred podcast platform to receive new episodes as soon as they're published.

Carl Bildt, former Prime Minister and Foreign Minister of Sweden, shares his perspective on Europe In 60 Seconds:

What's the issue with the letter in France talking about the "civil war"?

Well, I think it is part of the beginning of the French election campaign. We have some people in the military encouraged by the more right-wing forces, warning very much for the Muslim question. That's part of the upstart to the election campaign next year. More to come, I fear.

More Show less

Subscribe to GZERO Media's newsletter, Signal

Beyond SolarWinds: Securing Cyberspace. Watch on Tuesday, May 18, 2021 10am PT/ 1pm ET

GZEROMEDIA

Subscribe to GZERO Media's newsletter: Signal

Beyond SolarWinds: Securing Cyberspace | Watch on Tuesday, May 18, 2021 10am PT / 1 pm PT

GZEROMEDIA

Subscribe to GZERO Media's newsletter: Signal