Since it’s announcement a few weeks back, Zuckerberg’s new digital coin Libra has come under intense scrutiny from politicians and regulators alike, concerned of a new virtual currency that’s outside of the US fiat monetary system.
But Libra coin opens up a lot of possibilities to simplify mobile payments for millions of users and provide a stable currency, something that we take for granted in the west.
In this months Betting on Tech we discuss just what Libra can offer punters.
What obstacles lie ahead for bookmakers adopting this payments service.
And whether or not we’ll see bookmaker deposits using Libra coin in the future.
Libra for the masses
While our US friends are just dripped their toe into in field, sports betting in the UK has slowed down to single-digit growth.
As a result bookmakers are constantly throwing new and better promotions to lure punters from rival bookies.
Boo-hoo I hear to say!
While I don’t have much sympathy for them, i’m fully aware that bookmakers are facing an upward struggle. In the past that has meant creating innovative products such a money back specials and same-game-multi’s to stay ahead of the competition.
But most punters are looking for three things:
1. A well established trust-worthy (I use the term loosely) bookmaker site.
2. Decent odds and commission charges relative to other bookies.
3. A platform that makes the whole process a breeze.
The later is important, because one major part of that betting process is payment i.e. transferring funds from your bank account to the bookmaker.
I would argue that any bookmaker that takes the lead in accepting Libra coin will see a record number in new and existing customers joining their platform resulting in record profits.
Why would bookmakers choose Libra coin over crypto?
So i’m sure the next question any crypto fanboy will ask is:
Why choose Libra over existing crypto’s such as Bitcoin and Ethereum?
There’s a good reason why bookmakers have shied away from accepting crypto currencies in the past and will continue to do so…
Bitcoin, Ethereum and all other crypto’s were designed so the wallet holder remains anonymous.
And there lies the problem…
Bookmakers are heavily regulated by the Gambling Commission and are under strict guidelines to avoid any accounts that could be used for money laundering purposes.
With so many issues that come with crypto (some that may be over exaggerated) they’ve decided it’s just not worth it.
Why Libra is different…
OK so why would Libra coin be any different?
Well for a start it would be connected to a genuine Facebook user account.
Now I appreciate that at present, anyone can create a fake Facebook user account in minutes, so hear me out.
If Facebook wants to get this new digital payment system through congress, they’re going to need to have a compelling argument and the key to this will be to guarantee user authenticity.
Facebook will achieve this by using sophisticated artificial intelligent software that will reference your friends to your phone contacts and interactions within the account.
In this year alone Facebook has deleted 2 million fake account using this process.
The second is that your Libra wallet would need to be connected to a regular bank account which would further verify the account holder.
Facebook will also likely ask for some form of photo ID before signing up to Libra for enhanced security.
Is this all too orwellian for you? Yes but that’s another conversation…
With all of these security checks and financial regulations in place, bookmakers would be crazy to miss out on the potential opportunity that lies ahead with hundreds of millions of users with access to this digital payment system.
It’s a win-win for bookmakers.
A Spanner in the Works
The only thing that could stop bookmakers from integrating Libra onto their platform is of course if Facebook doesn’t allow it.
But given that Facebook would be paid by bookmakers a small percentage fee for each transaction you make, they would be fools not to.
Would Facebook allow bookmaker deposits using Libra coin?
Even though big tech companies portray themselves as being liberal and ethical entities. They are still multi-national corporations that need to be consistently improving profits over time to their shareholders.
Google for instance only recently relaxed their policy in allowing bookmaker apps onto their Play Store.
More recently a number of institutional banks and new online only banks such as Monzo have introduced gambling restrictions to allow user to block payments to bookmakers as a way to help curb gambling additions.
So there could still be push-back even if Libra was being actively used.
OK so Libra coin hasn’t even been released yet on Facebook and there are still many obstacles ahead for Zuckerberg and his team of developers to iron-out before we start using it.
But this new fintech payment system is just the beginning of a new wave of financial services we’re likely to see, whether government officials like it or not.
If bookmakers want to survive and fend-off the competition they have to be constantly improving their services for their customers and simpler mobile payments is just one of them.
While it’s unlikely we’ll see punters depositing to bookmakers using Libra coin any time soon. I can certainly see this and other stable-coin offerings from big-tech companies such as Google and Apple being introduced within the next five years. Watch this space!