It's not easy giving money to people in need.
In some countries, poor people may not have a bank account where a charity can transfer funds for financial aid. They may not have the ID — say, a birth certificate — required to cash a check at a bank.
And in an emergency situation — say, the aftermath of an earthquake — banks may not even be operating.
Could a single global digital currency — one that can be transferred through mobile phones — be a solution?
That's the way that Libra will operate. It's a new currency incubated at Facebook and announced in June. Libra, according to its website, wants to "reinvent" money by making a financial transaction as cheap and simple as "sending a text message or sharing a photo."
The main goal isn't to help out in humanitarian situations. But Mercy Corps, one of the world's largest relief groups, is so impressed with the potential benefits that it established a partnership with Libra this spring. And it's a high-profile partnership. When a Facebook executive testified about Libra before members of Congress this past week, he mentioned the Mercy Corps connection as a way of building up Libra's credentials.
But the partnership does raise questions. Not everyone in the aid sector is convinced that Libra will live up to its billing as a "simple global currency" — or that it's a good idea for a charity to form a relationship with Facebook, which is facing a $5 billion fine from the U.S. Federal Trade Commission for privacy violations.
For the aid group, which operates in 40 countries struggling with conflict, natural disasters and economic instability, "Libra opens up a lot of possibilities," says Ric Shreves, senior adviser of technology at Mercy Corps. "We work in difficult places. It's hard to get money onshore. Imagine if you had access to a currency that was widely accepted throughout the world."
One of the biggest reasons that Mercy Corps supports Libra is that it could help bring the world's 1.7 billion people without a bank account into the global economy.
It even sees Libra as a way to pay local workers in its field operations. In some countries with unstable economies, the group brings in large sums of cash, a risky way to do business.
Mercy Corps has long been seen by its peers as a leader in providing innovative financial solutions to the developing world. It has set up local microfinance banks in countries like Mongolia to offer small loans to people who otherwise wouldn't be eligible. And it has distributed cash aid in countries like the Democratic Republic of Congo, moving away from traditional types of aid like food or programs.
When Facebook asked Mercy Corps if it wanted to be a member of the Libra Association, the group tasked to govern and develop the currency, Shreves believed it was the right move.
"We've been advocating in this space for several years," he says. "When the Facebook opportunity came along, we were fortunate that we already had some familiarity with the topic."
In 2017, Shreves wrote a white paper for Mercy Corps called "A Revolution in Trust," which looked at how digital currencies like bitcoin could "positively be used in the humanitarian and development sector to benefit the people we serve," he says.
To understand the concerns about Libra, first you have to grasp how the currency will operate — although the plans are still being worked out.
Like bitcoin and other cryptocurrencies, Libra will use a technology called blockchain to secure data about users and their financial transactions.
But unlike bitcoin, Libra will be backed by real assets to help the currency stay stable. A basket of bank deposits and short-term government securities will be held in reserve for Libra coin to build trust in its value.
To make the service accessible, Facebook created a subsidiary called Calibra in June to develop a digital wallet, similar to the Venmo or Paypal app. The wallet will be available in WhatsApp, Facebook Messenger and as a standalone app.
These features, say Libra, will help make the currency reliable and remove barriers for people to sign up for the service.
The idea for Libra started at Facebook, and Facebook will be creating the infrastructure that allows people to use Libra on their phones. But Dante Disparte, head of policy and communications at the Libra Association, stresses that Facebook is not the owner.
The social media giant is one of the founding partners of the Libra Association, a group of 28 members that include powerful corporate entities like Ebay, Mastercard, Uber and Visa. Mercy Corps is one of four nonprofits in the Association; the others are Kiva, Creative Destruction Lab and Women's World Banking.
Each member — including Facebook — will have one equal vote in governing the currency and making key decisions on policies regarding consumer data and safeguards to protect against such problems as money laundering. And it will be the Association's task to get Libra in operation by 2020, says Disparte.
Some in the humanitarian sector doubt Libra's viability — and wonder whether it is little more than a Utopian ideal.
"Mercy Corps has certainly tried to be on the leading edge of some of these [financial] innovations," says Konyndyk, who worked at the aid group from 2008 to 2013. "Sometimes that pays off. And sometimes it doesn't."
One of the biggest concerns that Konyndyk has about the Mercy Corps' partnership is the lack of information about how the currency will work in the real world. "They are basically betting by being involved at this early phase," says Konyndyk.
Shreves acknowledges that there are huge barriers that Libra needs to overcome. For one, Libra will need to figure out how to exchange its coins into local currencies. So if the aid group gave money in the form of Libra to a refugee family in Syria, for example, that family could be able to turn that money into local cash. Otherwise, they will only be able to spend the digital currency at markets and shops at the camp that accept Libra — partnerships that would be worked out in advance with Mercy Corps. (The aid group uses similar models with its voucher programs at refugee camps.)
And the Libra members will need to work out how much personal information users will have to disclose to use the currency. Shreves imagines that a user's digital identity — for example, having an account with WhatsApp or Facebook — could be enough to be eligible. Libra says that the Association will have to comply with global financial norms and regulations, including country-specific standards, on what kind of data users will have to provide.
Some in the humanitarian community disapprove of Mercy Corps aligning itself with a controversial entity like Facebook. Over the past couple of years, the social network has been under fire for invasive data tactics and privacy violations. And it has recently been criticized for its inability to stop the spread of misinformation, which even Facebook acknowledges has contributed to recent violence in countries like Myanmar, Nigeria and Sri Lanka — countries where Mercy Corps works.
But what technology specialists in the aid community are really concerned about are the tech industry's "bait and switch" tactics. "They start [projects] that are seemingly benign, and then you find out they had a particular goal the entire time, says Linda Raftree, an independent consultant who advises international development groups on users' digital safety, security and privacy. For example, technology companies have shared or sold data to other companies or government agencies for commercial gain.
Just like everyone else, poor and marginalized groups are vulnerable to being taken advantage of by tech companies, she adds.
Disparte of Libra disagrees with this narrative. "Mistrust in Facebook should not necessarily convey mistrust in Libra," he says.
Protecting the interests of the poor is partially why Mercy Corps says it wanted an early seat at the Libra table. As one of the few nonprofit entities in the Association, the group hopes to represent the interests of its beneficiaries. The goal is to "voice the needs of the most marginalized and financially vulnerable," says Pete Lewis, vice president of marketing and communications at Mercy Corps.
Still, Raftree doesn't think Mercy Corps should be at the table at all. "Humanitarian and development agencies should not be tools of the corporate sector to access new markets," she says. "[Aid] agencies have a mandate to 'do no harm' and I'm not sure that a partnership with Facebook can fulfill that mandate given the power dynamics."
Some critics, like Dragana Kaurin, a human rights researcher at the Berkman Klein Center for Internet & Society at Harvard University, believe that Libra is getting more out of the relationship than Mercy Corps.
In a Medium post, "Why Libra Needs A Humanitarian Fig Leaf," published in July, she wrote: "Libra is being branded as a tool that will help millions around the world, and it needs Mercy Corps for this humanitarian washing."
Disparte, the spokesperson from Libra, disagrees with this characterization. "I reject [this] flatly." In order for the digital currency to reach its goal of being used by everyone — including people living in low-income countries — "you need partners [like Mercy Corps] in the design and in the DNA of this project."
Indeed, in that Congressional hearing this week, Facebook said that the nonprofit groups in the Libra Association are there to help safeguard against potential human rights abuses.
Rep. Ann Wagner, R-Mo., asked Facebook executive and Calibra head David Marcus: "How are you establishing appropriate human rights safeguards as you develop the Libra platform?"
Marcus responded: "We will have the right representatives around the table ... we have Mercy Corps, Women's World Banking and Kiva that are founding members of the Libra Association."
Disparte says that the Association hopes to bring in additional nonprofit groups as Libra works to bring the total number of so-called "founding members" to 100 over the next year.
Financial experts in Africa have their own set of worries.
Michael Kimani, chairman of the Blockchain Association of Kenya and a digital currency analyst based in Nairobi, worries that a global digital currency run by one of the biggest tech companies in the world is the modern-day equivalent of the British East India Company. Between the 16th and 19th centuries, the British trading body enabled colonial activities in parts of Asia, China, India and Africa.
"Facebook [is] using the poverty trope that has been used and abused by NGOs, white missionaries and [colonizers] in the past to gain entry into Africa for commercial interests," he wrote in a blog post on his personal website in June.
"The Libra Association is a neo-form of colonization, where, the global rich northern countries and their corporations sit around a table and decide what is good for Africa," he wrote. The Libra Association, notes Kimani, is comprised of mostly American and European companies.
Disparte of Libra says he "rejects that neocolonialism" narrative. "This is really about empowering billions of people financially and putting them into the system rather than leaving them behind."
Kimani worries what would happen if If Libra becomes widely adopted in Africa: National currencies could be destabilized, he says, and booming African mobile payment companies like M-PESA and Safaricom could be undercut. Libra could negatively affect the continent's whole financial sector, says Kimani.
And lots of people are wondering about Facebook's role.
"If [Libra] is successful, Facebook will have even more data on people's communications, behaviors and financial habits. This chain will all be owned and controlled by a U.S. corporation," says Raftree, the technology consultant.
Disparte says that the financial accounts of users and their social media accounts will be separate.
When asked how Facebook will ensure that users' financial information will be kept private from data gathered for the social network, Marcus said to the Senate Committee on Tuesday: "Within our infrastructure we have separated the data from the rest of Facebook's infrastructure and data in order for it to not get co-mingled."
Despite the criticism and the massive hurdles the currency will have to face, Mercy Corps is excited by the revolutionary potential of a global currency.
The aid group eventually hopes to receive some funding from the Libra Association to hire staffers to work on the Libra project full-time. But to date, Mercy Corps has received "no money from Facebook or the Libra Association," wrote Lynn Hector, a media and communications manager at Mercy Corps, in an email to NPR.
"It's early days right now," says Lewis of Mercy Corps. "We are trying to improve lives for people in the most challenging circumstances. We know that requires new approaches and new ways of working. We absolutely feel the pressure."
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