Consumers in emerging markets are willing to use a digital currency issued by a technology company, as long as that company isn’t Facebook, according to a new report.
Danielle Goldfarb, Riwi’s head of global research, said North American consumers are less eager to adopt tech firm-created currencies because they already have access to well-established financial and banking systems. “We experience fewer frictions in Canada and the U.S. … than people in emerging markets,” she said, citing “long-established legacy payment mechanisms like credit and debit cards.”
As Libra Association members quit, “increasingly it looks like Facebook is still in charge, and it always was,” Goldfarb said. There is a particular opportunity for digital currencies in emerging markets, where economic and political volatility can make new financial technologies like Libra more attractive to consumers, said Goldfarb, who co-authored the paper with Andreas Park, an associate professor at the University of Toronto Mississauga’s management department.
A white paper published by the Libra Association cites high remittance fees as another problem the digital currency is supposed to address.
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