Why Naspers is backing Facebook's cryptocurrency project - TechCentral

Why Naspers is backing Facebook’s cryptocurrency project

Bob van Dijk

Naspers CEO Bob van Dijk believes cryptocurrencies could have a huge and positive impact on societies by allowing for frictionless and costless transfer of value between people, something that doesn’t exist in the world of fiat currencies.

Speaking to TechCentral following the publication of Naspers’s annual results on Friday, Van Dijk said the group, through its subsidiary PayU, is “excited” about working with Facebook and other partners in developing the libra cryptocurrency.

PayU is one of about 30 firms that has joined the Libra Association, a group of companies that will have an equal say in how the cryptocurrency is managed. Facebook hopes another 70 or more will enter the fold in the future, bringing the total to 100. Visa and Mastercard, the world’s largest payments networks, as well as PayPal are on board.

PayU and the other companies have reportedly stumped up US$10-million (about R143-million) each to be founder members of the Libra Association and to help direct the development of the cryptocurrency, which has the potential to become the first crypto money be used on a mass scale worldwide for payments.

“It’s obviously early days … but the ambition that Facebook has with libra is exciting,” Van Dijk told TechCentral about PayU’s investment in the project. “It’s an empowering idea where you basically create a frictionless, costless way for people to transfer value to each other, so I think that’s exciting.”

He said Facebook was keen to work with PayU because the company connects many people in growth markets to the online financial world.

‘That’s what we do’

“That’s what we do at PayU: if you have a credit card, everybody can connect to the online world financially, but if you don’t, you need a payment service provider that is good at connecting whatever payment instrument you have to the Internet, and that’s what we do. That’s why it was interesting for them (Facebook) to partner with us so we could help them connect that digital world to the real payments world in growth markets like India and Latin America — and South Africa, for that matter. So, we think it’s a good match. We are excited about their ambition and we will see how things develop over time.”

It’s not Naspers’s first foray into the world of cryptocurrencies. The group is already an investor in Luno, a crypto exchange founded and run by South Africans.

“If you look at what crypto can mean for society, if you can get indeed to frictionless, costless value transfer that is secure, that’s something I very much believe in,” Van Dijk said. “There’s tremendous amount of waste and friction in the fiat currency system. In many cases, people who remit money across borders can pay significant fees, so I like the idea of crypto that enables people to do that value transfer without that friction and cost.”

However, he said it’s “hard to call” which cryptocurrencies will ultimately be the ones that are successful in achieving this.  — © 2019 NewsCentral Media, with additional reporting (c) 2019 Bloomberg LP

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