Facebook is not exactly the most trustworthy of the Big Tech companies but its reach is undeniable and the potential social impact of the social media firm’s recent venture into cryptocurrency has drawn quite a few nonprofits into the Libra Association.
The Libra Association is a Geneva-based nonprofit which would monitor the blockchain and manage the digital currency. Customer data acquired by the association will not be shared with Facebook, a promise that is greeted with skepticism.
Catherine Cheney outlines the hard choice for nonprofits in this report for Devex:
“All of our work is about how we can serve low-income women with the financial products and services they need,” said Karen Miller, vice president of knowledge and communications at Women’s World Banking. “This seemed like an opportunity not only to expand financial access to the unbanked and underserved women, but also to ensure that as this was getting developed, there is a voice at the table representing the majority of the unbanked and underserved people around the world — which are women.”
While many of the companies involved in the effort are investing $10 million, social impact partners do not pay for a seat at the table. Some see their involvement as an effort by Facebook, which has come under fire for its mishandling of user data, to bring in more trustworthy partners. But the nonprofits Devex spoke with say their input will be necessary for this effort to succeed.
Neal Keny-Guyer, CEO at Mercy Corps, thinks Libra “could spark a revolution in financial inclusion,” he wrote in a blog post about the launch. He outlined five ways this new global currency might benefit the people Mercy Corps serves, for example by providing a low volatility currency to people living in countries struggling with conflict, natural disasters, or other forms of instability.
“A global, stable, and secure currency powered by blockchain offers the potential to transform how aid is operated and delivered around the world — significantly increasing efficiency, transparency and accountability,” he wrote.
The blockchain on which Libra will be built could allow for innovation in user identification, a huge challenge for financial inclusion in low- and middle-income countries. And as an open platform, Libra will offer the potential for new players to create financial services for people living in poverty, Keny-Guyer noted.