Will Facebook Make Crypto Relevant For The Underserved?

Earlier this month, the WSJ reported that Facebook is building a team and getting its crypto ducks in a row to launch a “cryptocurrency-based payments system on the back of its gigantic social network.” Public details on the effort are thin and may have been outshone by news that one of Facebook’s co-founders is calling for the company to break up. But the fintech world is predictably aflutter about the perils and opportunities of a brand new digital coin that could allow users to hold and send money safely and securely to nearly every socially networked person on the planet.

Presumably, a key driver of this effort’s success will be WhatsApp, which by the last count has 1.6 billion active users. For the markets where we invest across Asia, Africa and Latin America, WhatsApp is particularly dominant — the rails upon which much of commerce already rides. It is not hard to imagine a world in which all payments occur via WhatsApp. We have seen what this could look like in India already, where WhatsApp payments have faced initial regulatory hiccups but are still poised to be a market-leading payments alternative, building on India’s quasi-government unified payments interface. Other markets, which don’t have India’s payment infrastructure and are more open to crypto innovation, could be next.

A shopkeeper using a tablet to access financial services in India

Accion

Regardless, for those of us focused on financial inclusion, Facebook’s foray into crypto is most interesting if it is serving fundamentally excluded customers and providing them with a product they really need. For all the bombast about crypto over the last half-decade, and the many business plans we have received from eager founders with Bitcoin signs in their eyes, we have yet to find models that convincingly center on the challenges of the poor farmer or mom and pop store. And, of course, the market opportunity is massive; despite the effort of…

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