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Libra, Facebook’s future currency: the stakes for Africa

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Libra, Facebook’s future currency: the stakes for Africa

Facebook, accompanied by 27 giants ranging from secure payment to online commerce and other key sectors of next-generation consumption, announced in June the arrival of “Libra”, its virtual currency. Unless the calendar changes, it will be in 2020. And among the markets targeted by Libra, the so-called “developing countries” and among them, the African countries. In a continent with a booming population, new consumption habits, which rely on new technologies, have a promising future.

Africa and virtual money: what are the issues?

The African diaspora sends more than $ 50 billion a year to the continent, usually forced to go through paid intermediaries that are the transfer companies. In a context of very weak traditional banking, alternative means of payment have found growing opportunities in Africa. The subsidiaries of major telephone groups were not mistaken, each from Orange to MTN or other, with its Mobile Money network.

In an article from Le Monde Afrique, the economist Jérôme Mathis finely analyzes the implications and stakes of Libra for Africa: “With its cryptocurrency, Facebook wants to compete with money transfer services in Africa”

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Libra would arrive in Africa in the context of the Eco, the currency that France wants to set up in West Africa to replace the CFA

While the question of the monetary sovereignty of French-speaking Africa still arises for detractors of the old colonial currency, the West African countries intend to adopt the Eco in 2020. It is in this context that will happen Libra, which will allow its users to operate money transactions directly via Facebook apps (Whatsapp, Messenger, etc.). Similarly, many small traders of the continent will use this currency dematerialized, far from the liquidity problems or recurrent absence of coins and small denominations to repay their customers. They also hope that the use of virtual currencies will reduce the risk of theft.

What to conclude?

While it is true that, like other low-banking zones such as India, Africa is a source of opportunities for a virtual currency, it should be noted that Africa once again seems to be in the debate simply as potential consumer. Even if no precise date has been put forward, Libra arrives in 2020. It will then be interesting to observe its reception by the public, and the mechanisms of reactions of the classics of the system. ©Dzaleu.com

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