Facebook sees its salvation with its cryptocurrency Libra

The article by Nishant Shah was published in the Indian Express on June 30, 2019.

In the early days, when we were still discussing the possible implications of building a data-surveillance system like Aadhaar in India, one of the persistent narratives was that in return, Aadhaar will build the infrastructure that gives legal and financial identity to the homeless, underserved, and the unbanked populations of the country. I remember how, at one consultation, Nandan Nilekani had jokingly mentioned that the single entry login framework of Aadhaar is easy to understand as the “Facebook of government services”. There were actual rumours that Aadhaar was seeking to collaborate with Facebook to see if we could log in to the public delivery systems using Facebook’s technical infrastructure.

The probable Aadhaar-Facebook collaboration never happened, but the other idea of Aadhaar enabling mobile payment, financial inclusion through digital outreach, and the possibility of leapfrogging an entire demography into digital transactions, has a different take. Aadhaar did not necessarily build a public infrastructure for banking. However, in establishing a unique identity, it did pave the way for the notorious demonetisation that pushed people into virtual and cashless transactions, and ironically, opening up the Indian market for the Chinese-controlled Paytm app to take over. Paytm is a clear symptom of China’s digital global dominance where TenCents and Alibaba are monopolising the world financial systems by becoming the de facto digital financial delivery systems for the emerging financial inclusion markets.

A little late in the game, but perhaps with a blockchain advantage, Facebook has entered this business of converting unique identification and engagement into a financial service, with the announcement of their new cryptocurrency endeavour, Libra. Much like those early days of Aadhaar, Facebook has positioned Libra as a pro-poor facilitator of financial inclusion for the large user base who are going to be connected to the Internet for the first time. The progressions of its interest in becoming the naturalised platform for all digital activities, as opposed to its presence as a space for sharing cute cat pictures and passive aggressive videos of relationships, is clear.

By launching Libra — the details are still scarce, but it seeks to create its own currency for the next generation, in collaboration with companies like Uber and Visa — Facebook has thrown its hat into a complete Black Mirror control of our digital lives. They want the user to first get connected to the Internet through Internet.org. Next, they want to control the websites that the users can use for free, by making Facebook the default entry point into digital data sharing. They would then collect and sell the data mined from these free services, and target the users to buy and consume using money developed by Libra. It is a fascinating, if not an ominous, cradle-to-grave scenario.

Currently, Facebook, in its humanitarian guise, is putting forth Libra as a .org service that selflessly seeks to transform the lives of financially excluded populations, who, in one fell swoop, would be online, on Facebook, and using Facebook’s currency in one single access point. However, it is clear to see that Libra is not a service for social good — Facebook is converting its advertisement-based exploitation of user data into clear financial goals. Remember, how we darkly used to laugh that data is the new currency? Well, here is Facebook’s Libra proving that data is not just the new currency, it can be the currency.

Facebook’s wealth has entirely been predicated on data as currency and attention as economy. The last few years have been a revelation of how Facebook has capitalised on its data and attention monopoly. In this new step, Facebook is no longer interested in using data to facilitate the financial expansion — with Libra, Facebook is going to become an actual broker of the money that we use. And once we have bought enough of this currency and use it in our everyday transactions, it can never devalue, because if it’s false, the biggest loser will always be the newly banked individual whose first financial identity is not going to be a banking account but Facebook.

In Libra, Facebook sees its salvation. It has long been critiqued that Facebook is facing obsolescence and threat from other social media networks and Libra is yet another way by which Facebook diversifies its portfolio and secures its future by making it the default service for how we live, work, talk, and love.