Issue 13: Libra is a Wake-Up Call
Welcome to Backstory, a weekly newsletter turning global technology shifts into a three-minute read. This week we’re looking at disruption in the remittance market – Joseph Dana, Senior Editor
THE BIG TAKE
Libra is a Wake-Up Call
By now you’ve heard of Facebook’s latest project, Libra. The new currency is presented as a cryptocurrency (its running on a blockchain!) but it’s not the next Bitcoin. It’s open source but backed by a basket of real currencies. It’ll rollout globally but is controlled from Switzerland. Regulators around the world have their reservations and promise investigations. But everyone seems to be missing a key point.
The disruption business: The global remittance market hit an all-time high in 2018. The World Bank estimates that the annual remittance flows to low- and middle-income countries reached $529bn in 2018, an increase of 9.6% over the previous record high of $483bn in 2017. The bulk of these remittances are subject to exorbitant transfer fees and use ancient technology. Can you smell the disruption potential?
Trust is the ultimate currency: Trust is a premium in the remittance world. Through communication applications like WhatsApp, which Facebook bought in 2014, the social media giant is a daily fixture of our lives. If you trust WhatsApp or Instagram (another Facebook-owned application with more than a billion users), why not Libra?
Untapped potential: The UAE has a major stake in the international remittance trade. Home to 200 nationalities, the country has an established and trusted remittance sector. Libra is a wake-up call. With the right digital innovation like a government-backed blockchain specifically designed for remittances, the UAE could command one of the most lucrative and overlooked spaces in the global economy.
QUOTE OF THE WEEK
“Is Libra ‘just’ digital money, or is it the foundation for the bitcoin dream of money becoming ‘software’? That’s the ambition.”
Benedict Evans, technology writer.
OUR VIEWS THIS WEEK
Digital hygiene: Let’s face it: we spend too much time staring at screens. It’s a slippery slope from information overload to digital burnout – and we pay the price with our health. That’s one reason the UAE announced The National Strategy for Wellbeing 2031 this month. We took a deep dive into the art of wellbeing in the digital age. It’s time to take back our health.
The next hotspot: To keep growing its booming technology sector, the UAE should look beyond its own borders. This week, we explain why Africa is one of the best places to start. As one of the most populated continents with a rapidly growing youth sector, Africa holds enormous potential for future knowledge economies. With capital to invest and knowledge expertise to export, the UAE can be at the forefront of African tech.
The cashless future: Speaking of the remittance market, how are we going to educate people to exist in a world without cash? The popularity of super applications such as WeChat in China demonstrate how easy it is for societies to move away from cash. The Wall Street Journal’s Steven Melendez hits the right note in a recent piece on our cashless future. Even the last holdouts may have to eventually embrace – or at least grin and bear – digital payment apps and learn the social rules around them.
AI for change: The pace of innovation in the AI space is staggering. Blink and you’ll miss critical developments. In Africa, as the MIT Review highlights, AI is transforming food security and health. Change in these sectors has the power to save lives and alter the path of countries. More impact than the latest smart assistant.