La Libra, Facebook's digital currency, announced for 2021 in reduced format

The launch of Facebook's digital currency, Libra , could take place in 2021. The project may benefit from favorable factors in the global economy, but regulators will have to be convinced first.  Facebook could launch Libra, its digital currency in 2021, we learn from the British media Financial Times, which quotes people close to the process. The product is expected to arrive in a limited version, after the project has met with great aversion from regulators, including in the United States, the country where the headquarters of the social media management company are located. The stakeholder association behind this digital currency project is now planning to launch a single version of Libra that will itself be pegged to the dollar, at the rate of one unit of US currency for each Facebook digital currency . “The other forms of currencies will be deployed at a later stage,” the FT source added. The exact launch date will depend on when the project

Covid-19 Relaunches Binary Currency Debate

The government, the private sector and the scientific community are unanimous that Cameroon’s membership of the franc zone undermines the competitiveness of the local economy, but the interest of a national currency is still debated.

Covid-19 Relaunches Binary Currency Debate

In its proposals to limit the negative impact of covid-19 on Cameroonian SMEs presented in Douala on April 2, 2020, the employers in Cameroon (Ecam), suggests that the government consider "distributing to consumers good consumer goods into basic necessities, convertible from financial institutions exclusively by companies authorized to receive them in return for the sale of their products and services. Transferring money to electronic money is the most efficient option, according to Ecam.

The idea of ​​distributing vouchers as a means of purchasing a certain type of local product is not new to Cameroon. It has notably been defended since 2007 by the economist Dieudonné Essomba who theorized it under the concept of "binary money". From an operational point of view, he explains, “the State of Cameroon could finance its development by issuing money from treasury ex nihilo, following the model of the printing press currently in force in the United States and in European Union, in particular to subsidize agriculture and local industry and boost consumption by restoring the stock market in universities, increasing wages and supporting poor households. The impossibility of using this money to import thus directs demand on local production, unlike CFA which has opposite effects. "

In the same vein, banker Nicaise Amougou said at an economic forum organized by the Lothe Consulting Assurance group on September 28, 2019, that binary currency can be a very good thing for underdeveloped countries. Relay currency to a large currency which allows to deal with local exchanges, binary currency "allows to fluidify the exchanges even for the smallest bearers who have nothing to do with foreign exchange reserves", he explains.

Precious currencies

Much more, justifies the banker, the binary currency can coexist in parallel with the FCFA without there being any worries. So you don't lose anything by trying. “Especially since it will allow real financial inclusion of small grants. For example, the grandmother of the village when she wants to buy her soap, she does not need the CFA because she has no problem of exchange, parity with the euro, all that does not concern her not. She just needs to have local currency. "

Opposite, other analysts doubt the positive impact of binary money on the local productive fabric. After a series of simulations on the clothing and tomato market, the economist Mebene, observes that "binary currency, as described by Mr. Essomba will only be effective if Cameroonian designers are already competitive, and have had productivity gains in addition (before the binary currency). The question of the competitiveness existing today is therefore not resolved by binary money. " In other words, the competitiveness of the local industrial fabric is a prerequisite for binary money. It cannot be the consequence.

In fact, the government classifies the problem of currency among the “threats, risks and mortgages” of its vision of long-term development of Cameroon, Cameroon Vision 2035. “If the attachment of the FCFA to the Euro makes it possible to impose a fixed parity which avoids drifts and ensures its international credibility, it nevertheless carries two heavy mortgages: first, it deprives Cameroon of a major instrument of economic management, monetary policy, which is a considerable handicap for the appropriation of a proactive development strategy; on the other hand, the peg to the euro, which has proven to be a very inflexible currency, leads to a permanent overvaluation of the FCFA, a slowdown in exports and an increase in imports which considerably affect the competitiveness of the national economy. (…) ”, We read in the Cameroon Vision 2035 working document.

Understanding binary currency

According to Dieudonné Essomba, "the idea of ​​the Binary Currency is based on the following reasoning: when a Cameroonian wants to buy clothes, he almost certainly goes to European thrift stores or Chinese clothes, because these are cheaper or more sophisticated than the clothes produced in Cameroon. As all clothes are sold in CFA, domestic products are beaten, and the development of a national clothing industry becomes impossible. But, if the same Cameroonian had at the same time the normal CFA and the local CFA, he would be obliged to devote the local CFA to local products and consequently, to Cameroonian clothes, because he cannot buy anything abroad with this money . As he is already dressed, he will no longer find it beneficial to import clothes; he will therefore spend his normal CFA which is convertible to the purchase of goods which are difficult to produce locally, due to their technical nature and their costs.

As we can see, this second currency aims to create a market for goods that Cameroon can manufacture since it conforms to its technical level, while preserving them from ruinous competition from abroad. At the same time, it directs Cameroonians only to foreign goods that they cannot manufacture themselves like cars (…) It is this technique consisting in issuing a Currency which does not come out, alongside another Currency which can come out which is called '' Binary Currency ''. "