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