The video discusses the new payment system Libra, which was co-created by MIT Sloan professor Christian Catalini while on leave from the university to work with Facebook. He discusses the motivations, challenges, and expectations behind the creation of Libra, emphasizing its potential to transform global financial services by leveraging Facebook's reach and technology. He explains his transition from academia to working on Libra due to his research in cryptocurrencies and blockchain technology, highlighting the ambition to address financial inclusion and democratize access to financial services globally.

The video also covers the skepticism and regulatory scrutiny that Libra faces, explaining the strategic phase of dialog with various stakeholders to ensure a successful and compliant launch. Christian Catalini details the design and economics of Libra, focusing on its utility as a medium of exchange rather than a speculative asset. The video addresses concerns about Libra's stability, potential runs, regulatory challenges, competition, and privacy issues, with emphasis on the collaborative nature of Libra's governance and its capability to revolutionize digital platforms.

Main takeaways from the video:

Please remember to turn on the CC button to view the subtitles.

Key Vocabularies and Common Phrases:

1. blockchain [ˈblɒktʃeɪn] - (noun) - A system in which a record of transactions is maintained across several computers linked in a peer-to-peer network. - Synonyms: (distributed ledger, digital ledger, decentralized database)

blockchain, which is the technology that underpins a lot of cryptocurrencies, including Bitcoin and Ethereum, is also what drives Libra.

2. cryptocurrency [ˌkrɪptəʊˈkʌrənsi] - (noun) - A digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank. - Synonyms: (digital currency, virtual currency, online currency)

But the cryptocurrency sector has tried for many years to solve this problem, and it's failed

3. financial inclusion [faɪˈnænʃəl ɪnˈkluːʒən] - (noun) - Efforts to make financial products and services accessible and affordable to all individuals and businesses, irrespective of their personal net worth or company size. - Synonyms: (access to finance, financial accessibility, banking inclusivity)

It became clear to me that a company with the engineering talent and reach and scale of Facebook were to design this. Right. And to really build a platform around financial inclusion and payments.

4. vested interest [ˈvestɪd ˈɪntrəst] - (noun) - A personal stake or involvement in an undertaking or state of affairs, especially one with an expectation of financial or other gain. - Synonyms: (personal interest, stake, concern)

I think any type of innovation of this scale has always faced, historically, some pushback. There's an existing market structure. There is, of course, a number of players that have vested interest in keeping that.

5. remittance [rɪˈmɪtəns] - (noun) - A sum of money sent in payment or as a gift. - Synonyms: (money transfer, payment, dispatch)

Libra will be backed by existing currencies, a basket of them. The idea is to make it again a global medium of exchange for things like remittances and cross border transactions.

6. fractional reserves [ˈfrækʃənəl rɪˈzɜrvz] - (noun) - A banking system in which only a fraction of bank deposits are backed by actual cash on hand and available for withdrawal. - Synonyms: (partial reserves, limited backing, non-full reserves)

And this is different than, for example, parts of the current financial ecosystem where you have fractional reserves

7. speculative asset [ˈspɛkjʊlətɪv ˈæsɛt] - (noun) - An investment with a high degree of risk, where the focus is on price fluctuations rather than the fundamental value of the asset. - Synonyms: (risky investment, volatile asset, high-risk asset)

If you’re trying to deliver basic payment functionality or basic financial services, you don’t want to expose people to a speculative asset.

8. interoperability [ˌɪntərˌɒpərəˈbɪlɪti] - (noun) - The ability of computer systems or software to exchange and make use of information. - Synonyms: (compatibility, integrability, connectivity)

The network ensures full interoperability. This is, by the way, another aspect where blockchain really helps, which is that the protocol defines the rule of the game.

9. validator [ˈvælɪˌdeɪtər] - (noun) - A participant in a blockchain network responsible for checking the validity of transactions and adding them to the ledger. - Synonyms: (certifier, verifier, approver)

You know, at scale, you could have a network with as many as 100 validators.

10. black swan [blæk swɒn] - (noun) - An unpredictable or unforeseen event, typically with extreme consequences. - Synonyms: (rare event, unforeseen event, surprise occurrence)

And in fact, you know, many of the conversations with regulators are about the black swan cases.

MIT Sloan Experts Series – Christian Catalini - Breaking Down the Libra Cryptocurrency

Welcome to the latest edition of the MIT Sloan Expert series which brings you an inside look at some of the most exciting new ideas and research happening at MIT Sloan. I'm your host, Rebecca Knight. Today we are talking about Libra, the new payment system announced by Facebook and the Libra Association. Joining us to talk about that is Christian Catalini. He is a professor here at MIT Sloan, on leave and the co-creator of Libra and the head economist at Calibra. Thanks so much for coming on the show, Christian. Thank you. It's my pleasure to be here today.

So, Christian, Libra, it has generated a lot of excitement, but also tremendous skepticism. We're going to get into all of the issues on the program today, but my first question for you is a professional, personal one. What made you make the leap? You've been a professor here at MIT Sloan for many years. You get a call from Facebook, they're starting a new blockchain project and they want you to create it. What made you go? So I had been doing research in the cryptocurrencies and blockchain space for many years.

For example, in 2013, with Catherine Tucker at Sloan, we co-designed the MIT Bitcoin experiment. And even there, the goal was always to explore what the technology could bring in terms of expanding and democratizing access to payments and financial services. And after multiple years from that study, I think I was getting increasingly frustrated with the fact that the technology definitely had potential. There were a number of interesting experiments, but when you looked at solving actual problems that people have, I think around many parts of the globe, there was a big gap.

And so when I started talking to David and Morgan at Facebook, this was in the early days where they're still exploring many different avenues around blockchain and how Facebook contribute to this space. It became clear to me that a company with the engineering talent and reach and scale of Facebook were to design this. Right. And to really build a platform around financial inclusion and payments. It could have a transformative impact on the globe. And so, you know, that was both a challenge, but also something extremely exciting. And being able to apply some of the theory and research that I've been doing in the field was something that I was looking forward to. Yeah. And so that's essentially how it started.

We're going to be talking about financial inclusion later on in the program. Libra has been in the news a lot lately. Some major partners have dropped out. Policymakers have expressed concern about it. Mark Zuckerberg was testifying recently on Capitol Hill about the project. What can you tell us about where things stand? What's the status?

So this is a phase that we were planning for, which was instead of doing what is often done in tech, where you deploy something, you launch something and then you can adapt after the fact, with Libra we realized this is a very complex industry, it's a regulated industry. And if we really wanted to have an impact, we needed multiple stakeholders to support the project and push it forward. That's why we announced it. And also planning for an extensive phase of dialogue with regulators, with policymakers, with NGOs and all sort of ecosystem participants that will have a major role in defining the success of Libra. And that's where we're in. So it's been a phase where you've heard for sure a number of criticism coming from different voices.

We've absorbed all of that. We're iterating on the design and what's important is that while the project was incubated within Facebook, so for over a year it was within the walls of Facebook. Now since October 2019, the association is going to be lead the refinement and improvements around things like the reserve and other aspects of the ecosystem. And what's exciting about that is that now you have a number of entities, 21 at founding, but of course be many more at launch, that are all working together towards the same goals.

Why don't you tell us a little about the nuts and bolts of Libra, its design, how does it work? How will we use it? Every decision in the economic design of Libra since the very beginning was targeted at making it a very efficient medium of exchange and payment tool, especially for cross border transactions. When we were looking at a lot of the excitement around blockchain, I think one of the things that gave us pause was this concept that you had all these new platforms, all these new vehicles potentially for transferring value, but you also had massive speculation, massive swings in valuations of these assets.

And if we wanted to make Libra actually useful, if we wanted it to solve real people's problems, we took a step back and asked ourselves, okay, how do we make sure that this can actually function as a payment tool? And that's why with Libra you have intrinsic value from day one. It's backed by established currencies. A number of the economic choices were really inspired by the objective, not so much the technology.

blockchain, which is the technology that underpins a lot of cryptocurrencies, including Bitcoin and Ethereum, is also what drives Libra. What does blockchain bring to the party here? Yeah, so in 2016, with my co-author Joshua Gantz at the University of Toronto, we wrote a piece on kind of the basic economics of blockchain technology. And in that piece we highlight two fundamental costs that we think the technology is changing and actually drastically reducing. The first one is one that is often talked about, which we call the cost of verification.

So the idea that by using a blockchain system you can verify a digital attribute. The fact that maybe I've sent you a payment from somewhere around the globe at a very low cost. So this is what we call the cost of verification. And again, it's something that intuitively I think people understand when they think about blockchain.

The second one, which is the more nuanced one, is what we call for the lack of a better term cost of networking. What it really means is that now you can design digital platforms where you don't have to trust a single intermediary, you don't have to trust a platform architect. And so the journey around Libra, especially when we talk about the market design and the protocol incentives, was really one in establishing a new model for trust in digital platforms. I think that's what blockchain brings into the picture, is a technology that allows you to design new types of digital ecosystems where the governance is distributed and they behave a lot more like open technology standards. And that's really important from an economic perspective.

How much is Libra worth and how will it maintain its value? Yeah, so Libra will be backed by existing currencies, a basket of them. The idea is to make it again a global medium of exchange for things like remittances and cross border transactions. And so at the beginning, the value which may be anchored around $1, will really depend on these assets behind it. And what's really important there is that these are all assets that are managed, governed and controlled by central banks. Not only just random central banks, but central banks that have a history of low inflation, of high independence and really delivering on that mission of value preservation.

So when you look at that mix, what's important from a user perspective is that if you're using and trusting the network, you know that the value of Libra will not be subject to speculation. It's not an investment vehicle, it's something that allows you to send a remittance at a much faster speed, with more reliability and with lower frictions and costs than currently possible today. So some piggybacking off of that. Some people have expressed a concern that there could be runs. Is that legitimate?

Look, when you think about a system, you always have to plan for the worst case scenarios. And in fact, you know, many of the conversations with regulators are about the black swan cases. Most of the systems can be extremely resilient. But then when you look at something like 2008 or other major macroeconomic crisis, you want the system to be ready for that. That's why Libra is fully backed. So essentially, for every coin to ever be minted, an equivalent amount of value has to be put into the basket.

And this is different than, for example, parts of the current financial ecosystem where you have fractional reserves. A classic reason for a run is that if you only have so much on balance relative to your liabilities outstanding, if I'm the first one to run to the bank, I may get my money out and later you don't. So Libra is designed to mitigate that concern essentially by being fully backed, even the last person should be able to get the value out.

Now that said, that may clean up the reasons for rational runs, but the system needs to plan also for irrational ones. And so the illiquidity of the assets, we're talking about cash and cash equivalents. So think about government securities that are extremely short term, three months or less. These are assets that move in extremely liquid markets. And so even if an irrational run were to form, the reserve would be in a position where they can liquidate those assets, return value to consumers and users across the globe, and not trigger panic.

So we are now going to talk more about these regulatory and policy challenges. To set the scene for us, the MIT Sloan Expert series recently sat down with Michael Cusimano. He is a distinguished professor here at MIT Sloan and an expert on platforms. Here's what he had to say about Libra's launch.

Peer-to-peer money exchange problem, which I think Libra is targeting, is not solved by the financial system we have in the United States in general. You know, there is a gap in financial transactions that Libra could fill even in the United States. For country-to-country money transfers among families, possibly for some purchases, it could save consumers quite a bit of money. And on the side it could make Facebook some money. However, if I use Libra to send money to my mother or my brother or my friend, I have to record it as an asset sale and report it to The Internal Revenue Service.

So unless the government comes up with some accommodation for Libra or similar cryptocurrencies, it's going to really dampen effects. In China, the social media platform WeChat added WeChat Pay, and that's been extraordinarily successful. And actually, the Facebook Libra model is at least in part influenced by the success of WeChat Pay.

And WeChat Pay is really controlled. It's not an open platform, and it's also not compatible with other payment systems. Whereas Libra is trying. Whereas positioned itself to be a more open platform supported by all the different payment systems and credit card companies, and all of which expressed an interest. Initially, they were inside the tent, but now they've all said they're stepping out of it. One of the problems is, what does open really mean here? And Facebook has said, well, there's going to be multiple companies controlling the foundation. It will be open or at least accessible to interface with all different types of banks and payment systems. But in fact, it really does seem that Facebook will control this.

Facebook is orchestrating all these different players. It's building the technology. It does seem to be a Facebook enterprise. I think it's bad timing. For one thing, they're in the middle of this uproar about data security, misuse of data, fake news, and I guess feelings of trust or just goodwill towards Facebook are pretty low right now. The government and a lot of users don't necessarily trust Facebook to have this kind of very detailed transactional data on what we're purchasing or what people are saving or where they're spending their money. Facebook has to ensure or convince everyone that it will not be misusing that data or selling it to advertisers.

If someone knows I've transferred money for a particular purpose, you know, advertisers would like to know that. So it has to build in those protections. And so far, almost no data on the Internet has been really secure, no matter what Facebook says. I don't think they can really promise us that.

So Professor Cusimano brought up a lot of thorny issues. Let's talk about regulation first. There's a lot of resistance here. What's your reaction to it and what are you doing to counteract it? I think any type of innovation of this scale has always faced, historically, some pushback. There's an existing market structure. There is, of course, a number of players that have vested interest in keeping that.

But when you look at things like remittances or other sectors where the markups are high, consumers have less choice. I think there's a pressing need here. We have about 1.7 billion people that are currently unbanked. And so we have to ask the question, why so many years after the Internet, we're still facing the same types of frictions. I think regulators are raising a number of important issues, and we're taking those all very seriously. Again, that's part of iterating and improving on the design. And all the members of the Libra association take this task very seriously. I think there's, of course, resistance, but part of the process now is understanding how do we get to a scenario where not only the network can launch, but can also achieve its goals.

So talk about the association a little bit more. What's behind the. What's the thinking behind it? So the association is really a cornerstone of deliberate design. You know, you could have imagined a counterfactual scenario of Facebook building an app, a wallet, like other, you know, other regions of the globe where you have very successful digital payment wallets like the one that Michael was talking about, and that would have been very different.

So here what the realization was really that for the project to succeed, you need distributed governance. Part of the reason why I think payments today are so ineffective is that they're extremely fragmented. We have all these separated solutions, and they don't talk to each other. So if you're on one specific platform, sending a payment to a different one is very cumbersome or completely impossible. That adds frictions, that add cost for consumers. And so the idea, by bringing a number of founding members around the table, is to make the network useful from the beginning.

You know, if you. If you have this coin that allows you to move value, but then there's no way to come in and out of the coin efficiently. That's not a great value proposition. And so the Libra association has the double role of bootstrapping utility into the platform, bringing use cases so that, you know, if you're receiving a remittance, you can convert it into your local fiat, but also over time, scaling the ecosystem, building new types of financial services and applications, and ensuring that users will have plenty of choice on a network like Libra. So as Professor Cusimana pointed out, though, several of the founding members have dropped out of the association.

That's Visa, MasterCard, PayPal. They're concerned that scrutiny to Facebook will extend to their businesses as well. Yeah, I think there's a lot of public information on the type of pressure that many of these companies were under by being part of such an innovative endeavor. It's important to remember that all these companies can still build on the platform once it's released. And so right now, the founding members, the 21 that came together, of which about 20% is NGOs and universities. So it's important to remember that it's not just corporates.

These are founding members that believe in the mission, believe in the goal of financial inclusion, and are willing to go through the process of regulatory uncertainty, regulatory pushback, to navigate this through. You know, there's a lot of upside in succeeding. And I think, you know, once the regulatory uncertainty is resolved, you'll see a lot more members coming and building. But Libra again, is built around the concept of an open technology standard. And so what's important is that not only many of these companies can join back if they want to, but also nothing precludes them to, you know, take advantage of the network once it's deployed.

So there's also the issue of competition, though, that he brought up in the video. Yeah, so that was actually coming in. As an economist, this was something that I really cared about. When you look at digital platforms, and especially something around money and value at this scale, it's really important to ensure that there is competition. And so the design of Libra, and this is something that is not often talked about, is one where anyone can build, compete on a leveling playing field. The network ensures full interoperability.

This is, by the way, another aspect where blockchain really helps, which is that the protocol defines the rule of the game. And so anyone could be a small startup, could be a financial incumbent, could be a tech incumbent. Anyone can build solutions, build products, and all those products can talk to each other. So like with email, if I'm a merchant and I'm accepting Libra through one payment provider or another, it doesn't matter. More importantly, if I'm a consumer, I'm using a certain wallet and I want to switch to another one that's seamless.

You know, that's not the state of the affairs today in the financial system. If you think about how costly and cumbersome it is to move between different service providers at times. And Libra really wanted to have at its core this idea that switching costs are going to be low, people are interoperable no matter what service they're using. And essentially you're encouraging competition and innovation. The idea is that, and this is counterintuitive, right, because often what we see in tech is you, you build a wallet garden and you try to keep people inside of it.

In this case, it's not a wallet garden. From day one, the access is the same for anyone. And so while it's like the Calibra one, the one developed by Facebook will have to compete on all sorts of dimensions, from price to features to privacy. And I think that's a scenario where consumers, at the end of the story, will win.

You mentioned privacy. So this is something that Professor Cusimano pointed out, and a lot of lawmakers have expressed deep reservations about Facebook's ability to keep user data private, safe, secure. How do you plan to do that? And how do you make sure that they keep their social data private from their financial data? So this actually goes back to one of my first conversations with David, even before joining the project.

This is David Marcus. David Marcus, yes. And what I asked David was like, okay, if I'm coming, are we going to have a chance to design this? Right? And privacy being one of the important dimensions, competition being another. And he said, absolutely. You know, I think Calibra is a very unique model where it's very clear. And, you know, we did research and we, you know, even the work that I'd done at MIT before on digital privacy, I think especially in the west, people want a separation between their financial and their social data.

You know, there's many reasons why companies may want to connect the two. But, you know, at Calibra, we believe that that data should be separate and consumers should have choice. So it's really important to think about issues like consent and how you develop it in an app to enable new types of experiences. But from the start, your social and your financial data will not be connected. There'll be measures in place, from encryptions to access control to ensure that that doesn't get linked. And more importantly, if you don't like the Calibre wallet, there'll be other wallets competing on different features. And so, you know, privacy will be a dimension where wallets will have to compete. And I think at the end of it, we'll see different business models, new, new approaches.

From a Facebook perspective, I think the idea here is not to use the data to show more ads or to sell more ads. The Calibra wallet will have new features, and we'll build on those, and that will be, you know, a new business model for the company, too. So, bottom line, how safe is Libra?

So there's a number of dimensions to safety. The first one goes all the way back to the blockchain here. You know, at scale, you could have a network with as many as 100 validators. Across the globe processing transactions. And just to give you a sense of how useful blockchain technology can be in this realm, in a traditional payment system, if you have outages, networks, you know, tend to go down. Libra will be a network where about one third of the nodes of the validators could disappear for whatever reasons, it's a cyber attack or whatever, and the network could still operate and provide payment functionality.

So it's a technology that's built for adversarial environments. On top of that, there's other important dimensions like fighting financial crime. And so the association is now working in a very comprehensive framework from anti money laundering to KYC to issues like sanctions, to really ensure that this network can not only be fast, cheap and efficient, but also meet and exceed current standards.

Around AML and KYC, I think often what you hear is like, oh, remittances are expensive, and that comes because of compliance costs. But when you look at it here, we have a chance to use new technology not only to lower those costs, but actually to do a better job, because the current system is okay, but misses a lot of steps when it comes to blocking financial transactions that are problematic. And when you make the technology digital, when you apply all sorts of new techniques, from machine learning to AI, I think we can both achieve that low cost, frictionless medium of exchange and make the network safer.

So now let's go back and talk about the ambitious goal that you talked about at the very beginning of our show. Libra's potential to bring about financial inclusion. To set the scene for us, the MIT Sloan Expert series recently sat down with Scott Onder of the humanitarian organization Mercy Corps. Here is what he had to say.

Mercy Corps is a global humanitarian organization that works in over 40 countries around the world. We help communities build secure, productive, and just communities, often in some of the most difficult circumstances. I lead Mercy Corps Ventures, which invests in high impact, highly scalable companies that are delivering products and services to people in fragile frontier markets. There's a real and pressing need to address what we see as a glaring flaw in the global financial system that leaves a lot of the world's most vulnerable people caught in a poverty trap from which it's almost impossible to escape. It's very expensive to be poor.

The cost of transactions and especially remittances can make the cost of being poor even higher. And so we're excited about the possibility of cryptocurrencies that are truly borderless and low volatility and potentially low cost to users to really drive down the cost of sending money. Today There are over 1.7 billion people that are completely unbanked. And that means they lack access to one of the most basic building blocks of prosperity, a bank account. They lack access to a secure way to store their savings, and they are almost completely unable to obtain affordable financial services like credit or insurance. With Libra, we see the potential to have a truly global low volatility and open source currency that can meet the needs of people that are currently unbanked or poorly served by the financial system.

LIBRA has the potential, because it is open source, to foster an ecosystem around it that could design a lot of different use cases and applications that are very relevant to people that are currently excluded from the financial system. We're excited as an aid organization to see how aid could be transformed through a truly frictionless payment system. It provides us with an opportunity to have more transparency and accountability and efficiency in how we deliver aid. So as a founding partner and as a member of the Social Impact Advisory Board, we are bringing the voice of the communities we work with to LIBRA governance. And we are working hand in hand with the partners of the association to fulfill the promise of inclusion for all and ensuring no one is left behind.

I do see the opportunities to use LIBRA in the near term very, very much in frontier in emerging markets because there is not as established an existing financial system. There's an opportunity to leapfrog that and to create a much more inclusive financial system. I think the more that LIBRA can be seen as an independent association that is governed by a range of good actors that care about social impact and inclusion, the better off that LIBRA will be and the more successful it will be.

So Scott talked a lot about many of the reasons that so many people remain on the fringes of society, financially speaking. You say blockchain could help?

Yes, and that's very much where we started. We started from a problem. Both the number that, you know, Scott was mentioning, 1.7 people unbanked. What's interesting about the number is that the vast majority of those people have a smartphone. So about a billion and a large fraction of that billion has access to digital data.

So there's really an opportunity here for crossing the last mile with Katrin Tucker. We wrote a piece actually on how one of the challenges with blockchain is that you have this beautiful digital verification machine, but then you have to reach the people, you have to reach that cross that last mile barrier and deliver service. And so part of the goal of the LIBRA association and the NGOs coming around the table is ensuring that you can cross that last mile. It's a complex issue, and it's not something that LIBRA will be able to solve immediately. It will take time.

And there's many pieces to the puzzle, one being, for example, identity. You want to lift identity standards so that you can bring more people into the financial system, you can provide them services. I think we've seen very successful efforts, for example, in India, where with a stronger identity system and then a unified payment system, you suddenly have a number of people that were on the fringes of the economy, of the financial system, having access to credit, having access to all sorts of new functionality that they were precluded and excluded from.

With Libra, I think the goal is to rely on this element of distributed governance and open platform to ensure that. If I'm an entrepreneur in a region where I feel like there's lack of financial services, there's lack of access to basic payment functionality, maybe you're a small business and you're dealing with cash, and it's risky now you can build those services, and again, you don't need to be a member of the association to build the services. And so I think what we will see across the globe, from Africa to Asia to many of these regions where users are underbanked or severely unbanked, which, by the way, it's also a problem in developed countries like the US you can start building new types of products that lower the cost, lower frictions, and take advantage of this global network in really creative ways, like Scott was mentioning.

I think there's a number of challenges in many of these regions, but together with the NGOs, I think the Libra association can really make progress on many of these issues over the years. But the cryptocurrency sector has tried for many years to solve this problem, and it's failed. What makes Leaper different?

Yeah. So, you know, one of the challenges, as we mentioned before, was the volatility. So if you're trying to deliver basic payment functionality or basic financial services, you don't want to expose people to a speculative asset. If I'm putting, you know, some value in it, it better be there the next day or not be subject to wide swings in volatility. So that, that's one component, the other one being really the focus on this last mile.

You know, why couldn't Facebook do this alone? Facebook could have built a great wallet on its own. But to really solve financial inclusion, you need partners around the table. You can't do it alone, and you need partners that understand the local institutions, the local environment, the local problems. And that's where not only the founding members, the founding members are kind of the seating set for that. But anyone else looking at Libra should see it as, this is an open platform I can build, I can, you know, drive value on it.

And now I have an opportunity to build those kind of services that really meet the local needs. So the focus on the last mile is something that also Calibra is very focused at the moment. It's a hard problem because again, we have wonderful technology. We have smartphones, but that has been very successful in some regions. So, for example, at Sloan Tafneet, Suri has done a lot of research on mobile money.

Mobile money has empowered women, for example, because now when remittances receive come through mobile money, they can be spent. They're more likely to be spent on things like tuition and food instead of being wasted. So these are technologies that can really have a massive impact in this region and drive economic growth. But you do need to solve that last mile challenge. So is that what keeps you up at night? Is it those last mile challenges? I mean, we've talked about a lot of different challenges that Lieber faces. What is it that keeps you up at night?

Yes, I would say that that's the most important one. Of course, you know, as you know, right now, we need to incorporate all the feedback and the regulatory questions that have been raised and so refine and improve the design together with the other founding members. I think that's the top priority, ensuring the safety of the network, but then also going back to the problem.

You know, if we're trying to really help people that are severely underbanked and unbanked, how do we build products and product experiences that promote financial literacy that help them really become independent and smooth? Those unpredictable moments in life where you maybe have either a health problem or something that derives cost on your life. And so when you're completely excluded from the financial ecosystem, it's very hard to buffer those shocks, whether through credit or through help from family and friends. That's the kind of work that will need to take place after the network is launched.

Great. We're now going to turn to questions from you, our viewers from social media. Please go to Facebook or Twitter and use the hashtag MitsaloanExperts to pose your questions. We've gotten a couple here. So here's the first one. How do you think the launch of Libra will affect other digital currencies such as Bitcoin?

So it's interesting, right, because as we were kind of already touching on in designing Libra, we had different objectives in mind and so we had to do different trade offs. That's why Libra and Bitcoin and other crypto assets are complements. I don't see them as substitutes. They can solve different types of problems to different audiences. I think what's exciting is that the space has a lot of experimentation and all these different experiments are going in different directions. So over time I think that would lead to more choice and more types of solutions. So in fact, I see them building on each other and eventually rewiring a lot of our financial ecosystem.

Okay. Another one is what's your best advice for a new MBA who hopes to get a job in the crypto industry? Yeah, and I think this applies not just to bitcoin and blockchain and cryptocurrencies or Libra. It applies more broadly, I think, to what I'm seeing in many fields like AI, from things like self driving cars to automation, quantum computing. I think MBAs today need to get closer to the tech and the engineering. So, you know, if you're an mba, the best thing you can do if you're really interested in cryptocurrencies and blockchain is talk to a computer scientist, talk to a cryptographer, and that conversation can be extremely productive.

Because I think often we have technology in search of a solution or a problem. So the MBAs can really help identify the business opportunity, identify the problems that people have in different regions, and then try to map new technology to those needs. Again, the journey with Libra was a journey of thinking about a problem, the problem of financial inclusion, working backwards and then tweaking the technology to where it was today and where it needs to be to solve that challenge. That's terrific advice. Thank you so much for coming on our show. Christian, it was a pleasure having you.

And thank you for joining us on this latest edition of the MIT Sloan Expert series. We will see you next time.

Technology, Innovation, Global, Blockchain, Financial Inclusion, Libra, Mit Sloan School Of Management