Facebook’s ambitious plan to release its own cryptocurrency dubbed Libra has been met with an avalanche of concern from regulators worldwide.
House Financial Services Chairwoman and U.S. Rep. Maxine Waters (D.-Calif.) called for Facebook (FB) to pause work on Project Libra, which is slated for release next year, for further regulatory scrutiny. Markus Ferber, a German member of the European Parliament warned the social media giant could turn into a shadow bank. Bank of England Governor Mark Carney noted that if it takes off, “it will have to be subject to the highest standard of regulation.”
But the CEO of Tala, a mobile lending company that focuses on the under- and unbanked around the world, sees a more optimistic possibility.
“The promise of it is exciting. What it could do for a company like ours is it could accelerate our ability to go horizontally very quickly,” Tala CEO Shivani Siroya said at the Fortune Brainstorm Finance conference in Montauk, N.Y. on Wednesday. “Right now when going into a new country, we are having to build all our own connections.”
Tala offers loans as little as $10 to the unbanked and underbanked populations. Thus these lines of credit go to consumers in Kenya, Tanzania, Philippines, Mexico, and India. And each country has different regulatory requirements—making it harder for companies to port platforms internationally.
Through Project Libra, Facebook plans to release the new cryptocurrency to its billions of users on platforms including Messenger and Instagram. This new borderless virtual currency could then be transacted not only within the app, but also with the partners on the project, such as Uber and Spotify.
And similar to Siroya, Project Libra’s plan it to reach some 1.7 billion people worldwide who cannot access banks, and may also see an opportunity to cheapen cross-border money transfers.
“What would be interesting for us is to see how they can execute on it, with managing regulators and intra-country regulation,” said Grab Financial Managing Director, Reuben Lai. “At Grab, that is the problem we are trying to solve. How can we move money across borders in the most seamlessly and the cheapest way possible. We could do that using crypto, or we could do that with our own closed system and integrating with multiple providers that offer the same functionality.”
Already, Facebook-owned WhatsApp is already being used by many low-income users as part of the remittances process, Libra Association’s Head of Policy Dante Disparte told Fortune in a recent interview—which could make Libra a natural fit.
“I never understood why they didn’t do it before,” says Softbank Partner Paulo Passoni of Libra, adding the caveat that he’s still getting his head around the project.”If you go to Latin America, every person there uses WhatsApp thirty times a day. Everything is on WhatsApp. I never understood why they didn’t monetize that.”
More must-read stories from Fortune Brainstorm Finance:
—Brainstorm Finance 2019: Watch the livestream of the inaugural conference
—Bank of America CEO: “We want a cashless society”
—Western Union and Zelle dish on the competition and talk mobile payments
—Charles Schwab CEO: Actually, we’re killing it with millennials
—Listen to our new audio briefing, Fortune 500 Daily
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