Facebook has unveiled plans to launch a new cryptocurrency called Libra, seeking to expand the world’s largest social-media platform into a much bigger ecosystem that, if it had its way, will roil global financial waves in a big way.
With more than two billion users worldwide, including about 50 million in Thailand, Facebook said it would develop the digital currency as a pivotal part of its current sharing platforms to offer its users a new medium for managing their income and spending. With Libra stored on personal digital wallets tied to the social network, traditional currencies such as the dollar, euro and baht will face a new challenge as they navigate the rapid growth of the digital economy and digital society.
According to Facebook, its mission is to tap the estimated 1.7 billion people around the world who still have no traditional bank accounts or access to modern financial services, and yet they account for 31 per cent of the world population. Libra in intended to serve them. They can use the digital unit as medium of exchange for goods and services as well as for cross-border money transfers. Small and medium-sized enterprises (SMEs) will also benefit from the new currency, especially in terms of obtaining credit on Facebook.
Facebook is also in the process of setting up Calibra as a subsidiary to run the digital-currency operation. For security purposes, it would ensure that users’ financial data is kept wholly separate from other personal data lodged with Facebook’s social-media platforms. To avoid wild pricing fluctuations, as has been the case with Bitcoin, Libra will be backed by real assets, such as bank deposits and government bonds, as well as equity stakes put down by Facebook and its partners to serve as the currency’s reserves.
At least 27 entities, among them Mastercard, Paypal, Uber and Spotify, have agreed to participate in the Libra programme, which can be used to pay for a wide range of goods and services which in the future could challenge the relevance of traditional currencies.
Underpinning Libra and other cryptocurrencies is the distributed ledger technology known as blockchain, whose applications are diverse and promise to reform the economy and society in a major way. In this context, Thailand should not miss the technology bandwagon. The new government needs to focus on developing human assets, especially for blockchain developers.
At present, several Southeast Asian countries have made headway on blockchain and on other related technology fronts. Vietnam in particular has built up formidable manpower in technology, including for blockchain developers. Thailand’s domestic shortage has led to the need for imported IT workers, especially blockchain developers from Vietnam.
Hence, the new government needs to pursue the next stage of the “Thailand 4.0” initiative with a human-capital focus to ensure that the country is not a net importer of skilled workers for the digital age, but a thriving platform for digital skill development and re-training platforms. Successful structural changes and digital transformation will figure prominently as the country’s KPI (key performance indicators) over the next decade, as increasingly evidenced by Facebook and the like.
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