Why Libra?

When Facebucks were first announced, the FT Lex column asksed why, if Facebook launched a “cryptocurrency” (let’s not get into whether it is a cryptocurrency or not again), "why would anyone want to use it?”. The column says that since purchases can be done "safely and easily with credit cards in stable, government-backed currencies” there is no market for a Zuckbuck. This is wrong, for three main reasons.

First, not all of Facebook’s two billion plus users have credit cards or bank accounts, and even if they do, it’s a pfaff tohave to come out of Facebook, log in to some web site somewhere and type in card details etc. Especially when you personal information is none of the business of the person you are buying from.

Second, a credit card works if you are paying a shop but it’s not that much use if you are paying a person, or you’re one of a group of kids trying reconcile and settle money for a party or something.

There are many reasons why Libra won’t work -

We’ll have to wait and see what it finally looks like when we get to the launch a year or so from now, but

So what is the business model? The FT notes that almost two-thirds of WeChat revenue comes from payments and less than a third is from advertising, which is Facebook’s business now. Clearly that data that flows from the payments business could be used to make the advertising business more effective.