There is a great debate on the sovereignty of monetary policies of nations like Nigeria when Facebook Libra cryptocurrency takes off. Libra could become a supranational bank, removing the capacities of central banks to use many tools to drive policies. The implication is massive as welfare losses can skyrocket in some economies.
Libra is not a Bitcoin competitor; it is Naira, Cedi, Rand, etc competitor. Nigeria’s National Assembly should debate Libra urgently for a plan of action. During this debate, they must get the Central Bank of Nigeria to explain the implications and offer a plan for action. Nigeria needs action plan because Facebook has just unveiled a native payment protocol for the Internet which was created with none. The Web 3.0 is largely here.
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Web 1.0: Web 1.0 consisted of static documents and read-only data (static web pages)
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Web 2.0: Web 2.0 introduced multimedia content, interactive web applications, and participatory social media, all of these mediated by two-dimensional screens.
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Web 3.0: But over the next 2 to 5 years, the convergence of 5G, artificial intelligence, VR/AR, and a trillion-sensor economy will enable us to both map our physical world into virtual space and superimpose a digital data layer onto our physical environments. Suddenly, all our information will be manipulated, stored, understood and experienced in spatial ways. That is the Web 3.0 which is also called spatial web.
Senate President Ahmed Lawan, here is a moment. Under Libra, the Central Bank of Nigeria may lose capacity to use many tools to manage inflation, and broad monetary policy. At least, have a conversation to get a line of action. I understand that doing anything may be hard since Facebook is a planet of itself; I had noted that point in a Harvard Business Review article.
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These companies aggregate the data and scale massively with near-zero marginal cost, which is all made possible by the internet. Because they are ahead with an enormous number of users, they keep getting better, and the data they accumulate drives improvements in their algorithms. Changing this order is largely hopeless, and that creates a competitive stasis for local entrepreneurs.
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How Facebook Libra Cryptocurrency Will Affect Nigerian Naira, Inflation, Banking
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