Experts warn Facebook’s cryptocurrency could help it become a virtual nation

WHY THIS MATTERS IN BRIEF

As more of us become a part of online communities we are seeing the rise of the world’s first virtual nations, nations without territory or borders that can threaten the status of sovereign nations.

 

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A couple of weeks ago Facebook announced its plan to launch a new blockchain based cryptocurrency called Libra that they’d developed using a new programming language called Move, and in doing so they added another layer to the company’s efforts to dominate global communications and business, and move one step closer to what some people are starting to call the creation of the world’s first true global virtual nation.

 

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If you don’t know what a virtual nation is then let’s catch you up quickly. A virtual nation is like a normal, physical nation with whatever benefits the leaders decide to bestow on their “digital citizens” – whether that’s helping them form new electronic companies that have perks attached, like Estonia does and who recently became the first virtual nation that could re-boot itself if its physical territory was invaded, or by giving them access to different types of welfare services that could include anything from free education, cheap finance and healthcare, and anything else you can think of – much in the same way physical nations do today.

And while virtual nations might sound like some online fad they have the US military worried enough to take them seriously as a security threat because, for example, while Estonia is increasingly becoming a virtual nation, so too is the terrorist organisation ISIS, and others. Physical territory, it seems, is so yesterday…

 

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Backed by huge finance and technology companies including Visa, Spotify, eBay, PayPal and Uber, and with a ready made user base of 2 billion people around the world, Facebook it’s believed could soon be in a position to pressure countries and central banks to cooperate with its reinvention of the global financial system, and use its platform to exert even more political clout.

Populated by users, powered by a self-contained economy, and headed by a CEO – Zuckerberg himself, Facebook, if it went down that route could be a formidable “nation” and I for one think that’s an interesting notion, and one that shows off just how much technology is now changing the world – a world where the digital world is now reaching a scale and a level of maturity that it can challenge sovereign governments. Just ponder on that for a while, interesting isn’t it!

 

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Putting all this aside for a moment though there is real potential to Libra, and it’s being designed as a form of electronic money linked to many national currencies. That fact though has also raised fears, for example in France, that Libra might someday be recognised as a sovereign currency, with Facebook acting as a “shadow bank” that could compete with the central banks of countries around the world.

It also doesn’t help that, as cynics point out, Facebook already seems to be positioning itself to evade regulatory scrutiny by creating a corporate subsidiary that will join an ostensibly independent governing body for Libra, and it may be that an entirely new set of financial rules and regulations is needed to shield the existing financial system from harm if the Libra becomes more popular than national currencies. Which, given the potential scale of its user base it could.

 

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Whatever Facebook does with it though, as both Facebook and Libra mature and continue to grow, one thing is clear Facebook, like it or not, now has yet another valuable tool at its disposal that will help it re-fashion society, and re-define the sense of nationality and the nation state at a global scale.

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