Libra – A solution to its identity problem
Facebook announced the creation of a cryptocurrency named Libra. Running on a permissioned blockchain, the governance model is backed by The Libra Association, composed of Visa, Mastercard, PayPal, Uber, Spotify and several others.
Libra will be exchangeable via Whatsapp and Facebook Messenger and it will allow for payments in “offline” locations.
According to the Associations’ website, its mission is to create “a simple global currency and financial infrastructure that empowers billions of people”. This includes, as they mention, the 1.7 billion unbanked.
In theory, Libra could provide a useful solution to all those with difficult access to money and banking services. People such as the unbanked, refugees or displaced people who lost access to those services. As Tykn’s CEO, Tey Al-Rjula, has stated several times: “in aid, time is lives”. Some people cannot wait for Monday to access funds because banks do not work during the weekends.
Why Libra may only be effective with the well established and leave out the marginalised they proposed themselves to help
Many things are still to be understood and clarified prior to its 2020 release but one thing is certain: to use Libra, a verification with a government issued ID will have to be made. But this won’t solve the problem of the unbanked and the refugees. Globally, 1.2 billion people do not have an identity recognised by a sovereign state. Either because they never had one in the first place or because their identity was lost due to inefficient identity registration procedures, wars or disasters. A case such as Tykn’s CEO who, at the age of 5, had his birth certificate destroyed because the birth registries in Kuwait were burnt during the Gulf War. Many of the unbanked and the refugees The Libra Association (and Facebook) want to help are the same who don’t own the necessary identifying document that will allow them to use Libra. Identity, the missing layer that already prevents these people from accessing services such as healthcare, education or banks, will again be the problem.
Within Libra’s Whitepaper, the only mention to identity is a vague statement: “An additional goal of the association is to develop and promote an open identity standard. We believe that decentralized and portable digital identity is a prerequisite to financial inclusion and competition”. This does not offer any indication of how The Libra Association is planning on including the unidentified.
How could then Libra help the unbanked and the refugees?
By implementing Self-Sovereign Identity principles and allowing for trusted organisations within the Libra ecosystem to issue Verifiable Credentials.
If a trusted NGO within the Libra Association could issue a Verifiable Credential to, say, a refugee, the other organisations in the Libra ecosystem would be able to trust that credential without even having to check the actual data contained within it. They would only need to use the blockchain used for the identity infrastructure (one such as Sovrin) to check the validity of the attestation and attesting party (such as that NGO) from which they can determine whether to validate and accept the credential.
Each user would keep his own data, those Verifiable Credentials, on his own personal digital identity wallet. Private and secure.
The innovative technology of Self-Sovereign Identities would allow trust between all the parties within the Association, while guaranteeing the authenticity of the credentials and the privacy and security of users. No personal data would be stored on any blockchain, or centralised servers, and each user would be the single owner of their own data.