A comment by Norbert Häring.
The announcement by Facebook to launch its own currency, Libra, together with around 100 partners, has rightly caused a great deal of excitement in Germany and other industrialised countries. But the industrialised countries are probably not the main target of the initiative. It is likely to aim first and foremost at defending US dominance in payment transfers against the increasing spread of Chinese alternative offers in Africa and Asia.
China is not only spreading in Africa and Asia as an investor, lender, commodity buyer and exporter. Providers of mobile payment services, first and foremost Alibaba and Tencent with the services WeChat and Alipay, are also expanding rapidly. They are cooperating with African banks and payment service providers such as the Kenyan M-Pesa. This enables merchants to make payments in Chinese yuan easily and cheaply. If payments to and from Chinese addresses are popular enough, this offer can jeopardize the dominance of the dollar for international payments in Africa. Because if customers know they can easily find a trader who needs yuan to pay for imports from China, they can accept yuan even if they have no China contacts themselves.
Other developing and emerging countries, especially in Asia, including India and Pakistan, are similarly competitive between the US and China and their payment service providers.
The US wants to counter the Chinese advance. By far the best vehicle to tackle this is Facebook. With WhatsApp and Facebook Messenger, Facebook has the dominant messenger services in almost all countries that are well suited for mass payment services. In Africa, Facebook offers free access to a basic version of the Internet via its own social medium. For millions of Africans, Facebook is synonymous with the Internet.
This background for the Libra project should be borne in mind if one wants to correctly classify the noise about the approval and regulation of Libra in the industrial countries.
However, the competition with China has probably only accelerated the project of an American social media currency. This would also have happened, because it fits into the campaign of „financial inclusion“ described in Part 1,