CNBC’s Jim Cramer said Tuesday that Facebook’s new Libra cryptocurrency is a “brilliant” endeavor that will boost the company’s status among consumers in highly volatile nations around the world.
The Libra will also be well-received in economically depressed areas of the United States, said Cramer.
“The disenfranchised will welcome Mark Zuckerberg as a savior, ” he proclaimed on CNBC’s “Squawk on the Street.”
Earlier Tuesday, Facebook announced the Libra coin, which will launch next year and will be run by a nonprofit association supported by a range of companies and organizations, including the social media giant. Facebook also revealed a new unit called, Calibra, which will host a digital wallet by the same name for storing and exchanging Libra. Calibra will eventually be a way for Facebook to make money on the currency.
Libra will use the blockchain technology underlying bitcoin on other cryptocurrencies. The goal is to make it as easy to send money across the world as it is to send a photo. But unlike bitcoin and other digital coins, Libra will be backed by government money.
David Marcus, head of Calibra and former PayPal president, said CNBC’s “Squawk Box” that the mission for Facebook is to connect consumers across the world and lower cross-border barriers.
Cramer recalled a trip last year that he made with J.P. Morgan chief Jamie Dimon to a “tougher part of Philadelphia” where the bank was trying to make inroads. The “Mad Money” host said, “All you saw were check-cashing outlets,” charging high fees to the so-called unbanked. Libra will be a welcome tool for people in the U.S. and globally who can’t or won’t use banks to store their money or make transactions, he said.
Cramer added it will also help workers living in high inflation nations avoid seeing their money “constantly debased by the Venezuelan government, by governments that are irresponsible.”
Last year, Venezuelan leader Nicolas Maduro implemented a monetary system overhaul that resulted a few months later in runway inflation above 1.3 million percent. Last week, Venezuela began issuing currency in denominations of 10,000, 20,000 and 50,000 bolivars. Before the Maduro changes, the largest banknote in circulation was 500 bolivars.
“If you’re in one of those currencies that are terrible, I think it’s brilliant,” Cramer said. “Forty-eight percent of the world is in currencies that are terrible.”
Disclosure: Cramer’s charitable trust owns shares of Facebook.