Alex Floate, a member of our Emerging Fellows program devotes his ninth blog post to Facebook’s digital currency innitiative. The views expressed are those of the author and not necessarily those of the APF or its other members.
When Facebook first premiered their idea for a digital currency Libra in 2019, the reactions ranged from eye-rolling to predictions of a vast conspiracy to control the world. Most pundits could not understand how or why a social media platform would create or need a currency. The calls for regulation or legal action to disallow the notion were immediate.
However, within just a few years of introduction, more governments turned to nationalism or authoritarianism, and the Trumpian trade and currency wars of the early 2020’s disrupted global markets. Despite their mutual needs for trade and economic growth, the use of national currencies became a point of contention as the world fragmented into tribes.
The group most affected were entrepreneurs in the countries once called the third world. For them, globalization had brought a connection to the wider world of consumers, especially as 7G broadband and localized electrical grids were built out. The initiatives began by the Chinese in the 2010s to build out transportation infrastructure in Africa were bearing fruit by the mid-2020s. Small companies and farmers found they could directly market and ship to global customers. Into this currency void stepped the technology companies that were enabling the global marketplace.
Although Facebook was the first to market with a digital currency, Amazon, Alibaba, and a few regional upstarts began using their positions as marketplaces to promote their in-house digital currencies as a means of global trade. They created means to earn additional currency, such as an exchange for personal information, reviews, actions as beta or market testers, or selling and buying on the marketplace. The member could earn additional Amazonians or Alibablers to spend within their respective marketplaces, and even at many outside venues.
As the reach of the tech companies expanded beyond supply chains and into services, the ability to negotiate paying for goods in services in their own currencies was greatly expanded. This allowed many companies to offer the option of being paid in corporate or domestic script. The corporate script became highly preferable as the companies offering it were able to better manage it for inflation and deflationary pressures. Additionally, by restricting it from most secondary markets the ability to manipulate the currency via speculation was taken away from those seeking to make money off other’s misery.
Companies also created a social scoring like the system China implemented in the late 2010s. This system was more reward than punishment and sought to incentivize behavior in line with the company’s values and social conscience. By allowing the company to track the individual throughout their day, including conversations and actions, the company could determine if they were acting as a good citizen of the planet.
When a person’s interactions were friendly, helpful, informative, and advanced civility or relationships, the score could potentially increase. Energy and water usage, recycling, using public or personally powered transportation were also monitored and properly rewarded. The opposite of these positive actions lowered the score. Higher scores were rewarded with extra currency, merchandise, or socially with offers of more prestigious jobs or responsible public positions. By 2040 these new scoring systems had replaced nearly all other methods of determining financial trust for an individual or organization.
By the year 2050, most smaller countries had outsourced their treasury functions to either Amazon or Alibaba. For most of these countries the new currencies offered access and stability and an opportunity to grow their economies. Entering the global marketplace on an equal footing allowed many countries to shake off the ‘third world’ label, and this was especially true on the continent of Africa.
© 2019 E Alex Floate