There is basically no way that a self respecting first world country will allow this to happen. The national federal reserves in Europe are still responsible for international settlements, that gives a tremendous amount of power and oversight, they won’t allow a third party to take that away from them.
Facebook may be able to buy off US regulators, but they won’t be able to convince the EU.
Wouldn't be so sure that Uncle Sam isn't going to crack down even harder than the EU. Financial control is a big part of US power abroad and I can't imagine that the US government is going to tolerate a private entity taking that control away, and that's probably for the better. This entire Facebook currency thing sounds like something out of Shadowrun.
I think it is likely that this is backed by a substantial set of US political interests. People that want to experiment with UBI might want to see a Facebook sanctioned UBI.
This is basically any libertarians pipe dream.
On the other hand I think you are right. I expect any US based opposition to move swiftly. Regulations should probably be the least of their concern given how the US has treated entire Nation States trying to move away from US dollar denominated Oil trade. It will be interesting to see what the equivalent of a no-flight zone, arming militants and sending “advisors” will be.
I wonder if some of the big companies would like to bring back the company store system - with the rise of populist politicians and the rolling back of existing protections I am a little worried about this.
Libertarians believe in the government staying out of your business and letting free markets do their thing.
With UBI everyone gets an automatic safety net and the ideal is that if all markets were free of government intervention people would buy what they want, and competition would down the costs of healthcare / education / food etc. So that those with UBI can have the basic necessities of life, without the government needing to do anything (other than dealing with tragedy of the commons type problems.)
Well I am not a libertarian myself but as far as I understood people pushing for UBI are also pushing for a drastically smaller administration which is currently administering social benefits. This would be achieved by basically eliminating most other form of benefits, similar to how they propose to hand out vouchers for services like education instead of operating schools.
You have misunderstood libertarianism, just because it wants to see small to none state does not mean it would support UBI or other forms of socialism.
This is a drastic oversimplification. From my experience, libertarians are usually against UBI. There is certainly a large enough current that you can't make this generalization.
I think libertarians mostly view UBI the same way leftists view things like laws enforcing collective bargaining. Some support it as an improvement of the status quo, others oppose it because it gets us no closer to their actual goal.
>Wouldn't be so sure that Uncle Sam isn't going to crack down even harder than the EU...
I wouldn't be so sure that Uncle Sam wasn't in on it in the first place. The potential military, economic, and intelligence value of this thing should be self evident.
Thats assuming the EU isnt easy to buy off - looking at a couple of regulations in the pesticide industry its easy to see they're very accommodative. Lobbying is big business in Brussels.
You can buy them off, but successful lobbying probably takes years of relationship building to make it look like marriage, not prostitution, to those corruptees that think of themselves as ethical people. You can't just arrive and buy some legislation.
In October last year, Facebook hired Nick Clegg, former UK Deputy Prime Minister and well-known Europhile, as head of Global Affairs and Communications.
So that's your years of relationship building, acquired in one go.
Facebook has already wreaked havoc with it's power, it has shown how deceptive it is, it has resisted regulation, it's chief executives have refused to testify to governments.
Now them having a cryptocurrency is alarming. Why does it really need to do this? There is nothing anonymous about facebook. Whatever transaction is done, will be linked to your account.
This is dangerous.
Whether they start or not is irrelevant, as informed users, we must spread word in our circle to avoid such cryptocurrency like the plague.
It will no longer be sufficient to try to prevent FB from going ahead with this plan, because they will, if not now, after a few months or years from now. The only thing that will prevent this from wreaking havoc in the world is to spread awareness of how bad this is and how much more power it will give to FB.
I am genuinely surprised people would allow a company collecting data to be their financial provider.
This is mostly contrary to the idea behind bitcoin to have a decentralized currency beyond anyone's control. The unholy alliance between facebook, ebay, visa and mastercard is certainly no advantage to the user.
But I am afraid convenience will bite us in the ass again.
Sure, it's cancer compared to other cryptocurrencies, but what can possibly go wrong if it competes with fiat? People in the article started to speak about better money transfer technology. Why only now? Because they stagnated as a monopoly.
Haven't read any of the news about how this currency is supposed to work, but if it lets anyone bypass the SWIFT system then the US should probably ban it too. Being able to sanction anyone is a powerful tool to give up to Facebook of all companies.
This is still a system on American control even if other currencies than USD are supported.
One thing is that countries may be cut off from swift. That limits money transfer in and out of the country but the bank transfers within the country would still work. Blocking this could potentially halt the internal money transfers of a country.
Anyone can build their own wallet, Facebook will offer its own wallet (calibra) but you will not have to use it. tl;dr, they can't freeze your wallet if you're not using theirs. Paypal, visa and coinbase will offer their own and you can build your own.
> they can't freeze your wallet if you're not using theirs
This is false. The wallet just reflects what's in the ledger, and the ledger is controlled by Facebook('s consortium). They can absolutely freeze any addresses they want. Furthermore, they control the currency peg and thus the value of the coin; they can make any address ineligible for redemption and thus worthless. And they certainly will, in the name of preventing fraud and crime and terrorism.
This is false. The wallet just reflects what's in the ledger, and the ledger is controlled by Facebook('s consortium). They can absolutely freeze any addresses they want.
Isn't this a transfer of power over the movement of money away from the government, and to a corporate consortium?
And they certainly will, in the name of preventing fraud and crime and terrorism.
Which will result in the US government using those accusations more.
Visa and mastercard are already banning people left and right, it is not a transfer of power though. They're working hand in hand with the government, when the US government got mad at Wikileaks during the Obama administration, visa, paypal and mastercard banned them without blinking after the government asked them to I guess.
This is true of most blockchains though, if a majority of nodes are blocking an address, the coins can't be transferred. Granted, this is more likely to happen with tiny consortiums like Libra.
Do you know how would this work in Libra's case in practice? Would there need to be a super majority to block a given address? I guess the government could force the whole consortium to block an address though.
On the other hand, the government could also use anti-terrorism law to force coinbase and any legal exchanges to ban a certain bitcoin address and any movement from this address. Coinbase already banned all people sending coins to sites such as the dailystormer for example. While this was a private initiative, the government could pass a law to ban people and businesses from sending bitcoins to Iran for example. Hard to enforce I know but scary enough to be problematic (see war on drugs for example).
The value of a valet is equal to the amount of coins that can be transferred out of it. So if FB&co block transactions you can say bye bye to your “own” valet.
statistically, so few people use bitcoin, that one might as well round to zero, so governments do not need to care. FB has 2.5B users whom they can easily manipulate, hence governments care.
I don't think governments 'dont care' but rather they are powerless to act effectively against Bitcoin. A ban would legitimize its utility to people skeptical of central banking. Because Satoshi is anonymous, there is no person or team to attack with legal or extralegal coercion. Only way to effectively take down bitcoin is to spend ~$1B building a huge mining operation with the purpose of launching a 51% attack, but even that could be mitigated.
> A ban would legitimize its utility to people skeptical of central banking
i.e. a tiny irrelevant niche. I don't think banning bitcoin is a good idea, but a ban would be highly effective because nobody cares enough to risk fines or jail time over something they have no use for anyway.
A government can ban BTC<>fiat exchanges within their country fairly effectively. A ban on transacting on the Bitcoin network would be extremely difficult to enforce - VPN to a different country and they've lost you. Cyberpunks could still cross borders to cash out, or just purchase digital goods/services.
> A ban on transacting on the Bitcoin network would be extremely difficult to enforce
1. I disagree. There are many effective methods a government could utilize to enforce a ban on transacting on the Bitcoin network. I could think of many technical examples, like the use of weaponized malware and 0-days to spy on the population and uncover users. Yes, some technical people could evade detection, but most people (including most programmers) would be caught up quickly due to opsec mistakes. There is also violence, which would be very effective unfortunately.
2. Even if they couldn't effectively ban transacting on the bitcoin network, the network itself is useless if the state makes it illegal for businesses to accept bitcoin.
3. Strong enforcement isn't necessary since the masses are already uninterested in blockchain tokens except as a vehicle for speculation. If the government made it illegal most people wouldn't think twice about it. Why bother?
You have no idea what nation states use their 0days on. Additionally, using a 0-day doesn't necessarily burn it, especially against a tech illiterate population.
There's a simple way to ban bitcoin. Govts already regulate the banking and payment companies. Govt can compel them to not allow/facilitate exchange of bitcoin for fiat currency or vice-versa. Without banking/payments infra supporting such a conversion (only hand to hand cash transfer and exchange conversion by person to person transfers would be possible) which will be very small and network will be dead soon. But obviously govts didn't do that and hence bitcoin has so much usage and hence such high value.
I use a decentralised exchange to both buy and sell bitcoin, all traffic is routed p2p through the tor network. Binance one of the largest exchanges in the world is building their own DEx too.
Your hypothetical situation is blown out of the water here by existing technology that is clearly very hard to stop. How are governments going with banning torrents?
Yeah, but those who are sanctioned by governments have much more incentive to use Bitcoin, so the fact that most don't use it is not important, what is important is its existence as an option.
It's not really an option. The hard (and VERY low) cap on transaction volume is a joke. If you think a Bitcoin is actually an option for actual banking for actual people (not just the current set of a few thousand gamblers), you are delusional. The current financial system DOES process more transactions in a millisecond than Bitcoin CAN in a week.
>Parity with this basket of currencies will be reached via a redemption mechanism similar to other stablecoins such as Tether
So.. no reliable way to actually get your monopoly money into USD? at least they don't falsely claim to have the USD sitting in a bank, that's a start i guess.
An article I read claimed exactly that, saying that the real money sitting in a bank would also be used for generating interest to pay back initial investors
Can't find the source but it was reliable, Techcrunch or the New York Times I think
People who are unfamiliar with WeChat Pay in China, are underestimating the potential for the FB cryptocurrency. The integration of social media and payments by WeChat strongly facilitated consumer adoption of their payment service. Everyone already had phones, everyone had WeChat installed on their phones. When payment services later became available through WeChat, there was a minuscule barrier for customer adoption. As people started using WeChat Pay they quickly found it more convenient for physical and online payments, money transfer between friends, and financial management. Next services like taxi hailing + payment became integrated into the WeChat app, increasing the convenience. The combination of convenience, preinstallation in the dominant social application, and low barrier to entry was a killer combination. In my estimation it turned out to be a stronger combination than Alipay, which started out as a payment service integrated with TaoBao (comparable to the Ebay / Paypal).
Since Facebook has a dominant social app and messaging app position worldwide, their payments service will have worldwide penetration from day one. Since Facebook can do software, the service interface will be more convenient and user friendly that existing services in the first world, and infinitely more so elsewhere. Money can be made here and evidence suggests people want to adopt when there is a no effort road to adoption. There are vested interests to deal with and satisfy on the road to market penetration, existing market players and governments, but American entrepreneurs like Gates and Jobs were able to overcome vested interests in their time and I suspect Mark is equally resourceful when he wants to be.
There is one huge difference between WeChat Pay and what Facebook plans. Namely, that the People's Bank of China[1] has an iron grip on all such systems used in China.
Facebook plans a global currency undermining any control of the national central banks and subverting national monetary policy. I don't think that any central bank will allow this to happen.
Add all potential KYC and AML issues and I'm not sure if the "move fast and break things" mantra is applicable in this case.
Money is not just a method of exchange in which the markets decide. The well being of countries is directly linked to monetary policy. I don't think that they really factored that in in their libertarian fever dreams.
Its quite telling that the promo video only shows people from countries with a substantial unbanked population. I do think that getting these people banked is safer and more secure for them (mitigates risk of being robbed) and enables a more vibrant economy (more lending because of deposits), but why should Facebook be the entity behind this?
I am a cautiously optimistic person, but this is giving me the jeepers. I can't quite put my finger on it, but it doesn't feel right.
This is very unlikely, in places with social unrest people get forced to go to bank withdraw cash, or even as far as sale goods to make the cash for gangster, making it digital will make zero difference.
> more lending because of deposits
Lending by who? what deposits? lending most of all depends on risk which requires a stable society and some resemblance of an economic system and policy.
It's my money, so also my flow of control, not that of the country I live in.
I know this is open ups the whole discussion about cryptocurrenies all over again, but maybe some people don't want government to have the monopoly on storing and transferring 'money'.
>It's my money, so also my flow of control, not that of the country I live in.
It is a bit less binary that that. Money is only a bunch of papers or bits moving around.
The fact that everyone "believe" in a money is that if you don't play nice with the bunch of paper or bits, like not paying your debt, "someone" will make you pay, seize your asset, throw you in prison, or sell you as a slave to your creditor depending on the jurisdiction.
It does not mean that the state should be the only one to have the power to issue or create money, but without rule of law there is no money so to speak. So I believe that "power" and "money" are more closely related that we want to usually acknowledge it.
What is interesting is that with its global reach, Facebook has probably already more power than a small state.
> When people are asked why they remain on the fringe of the existing financial system, those who remain “unbanked” point to not having sufficient funds, high and unpredictable fees, banks being too far away, and lacking the necessary documentation.
Unfortunately the reality of being "unbanked" is that government regulations will still put up a barrier. KYC laws require "necessary documentation" which these big providers won't be able to get past. Local options may still be better in these cases.
For example, people who were born stateless may not be able to easily acquire KYC documentation. They may not have documentation of being born. Being locked out of ID options puts a limitation on getting past KYC.
In the Philippines, there are mobile options where you can deal with small amounts of money without having to verify your identity. These options are run by the major telco's here.
This is all a game. Bitcoin and other coins are currently available for use by anyone. Their value is decided on network effects or supply/ demand. It's not regulated and can facilitate global transactions (I.e if you have patience and time). For some people it's working well. What we will probably discover is as long as Bitcoin is difficult to use and targets people with niche requirements the government will look the other away. As soon as someone wants to make this easier well things change. Libra was a very convincing sell to me. The challenge with bitcoin is the volatility potential. Libra might convince more people to think of Bitcoin more.
Biggest bank in Russia (Sberbank) introduced a simple feature:
if you know a phone number of a person, you can enter it on their website and if the owner of the phone number has any account with Sberbank you can send him money.
The convenience of such feature was so big that it caused people move from other banks to Sberbank just to use it. Eventually leading to government regulation making this feature bank-agnostic.
The point here is: people who are used to Internet and the way things work here can't understand the old-fashioned companies.
Why sending money overseas cost such enormous amounts of money?
Why bank fees are so difficult to understand?
Why there is fee when moving money within the same bank, when we all know that it is simple transaction in the database?
Say you're out eating with mates and you want to split the bill, no one really carries cash anymore here so that's not an option (and also annoying to split). Writing a cheque is obviously ridiculous and a bank transfer requires a lot of needless information. A "swish" as we call it takes about 10 seconds, 5 if your friend is already in your phone's contacts.
It's just an ease of access / quality of life thing. Your question is more or less equivalent to: "What's the purpose of QR-codes? Just enter the URL!" - it's easy, fast, and frankly nice. A really really simple and great way to send small amounts of money between people.
Same thing in Canada. It's called Interac Etransfer. Link your email account to a bank account, and you can send someone money for $1.50 per transaction. Made it much easier to pay back friends if you don't have exact change, or a remote landlord as I don't have to mail paper cheques and wait for confirmation.
I put this in another thread but I've been shouting it far and wide today.
I've lived in China and seen how this plays out. Facebook's new Libra Blockchain will be a centralized bank but way more dangerous.
It will allow for a worldwide social credit system. If Facebook decides to remove you for wrong speak or wrong think, your money and many services will be inaccessible.
Further, they have no mandate like the central bank does to increase employment. Their mandate is to make money for corporations. This will lead to global social unrest.
This will put some third-world countries in complete control by Facebook. I mean, whoever runs the currency, is the country. But in this case, it will be completely controlled, as it's also many of those countries main source of communication. Therefore, if Facebook's Libra is a countries main currency and social network, that country will be owned by Facebook.
Finally, the regulations on crypto and blockchain are still new. This is in Facebook's advantage as they can start lobbying to have these laws in their favor. They can argue for less transparency, as they are a bank, and this fits with their new privacy marketing message.
This is extremely subversive and Europe is already rightly pushing back. America will be next. On one hand, I love seeing the existing financial system panic when new technology comes out. On the other hand, under no circumstances will I accept a world where Facebook started the one world currency.
If the same comment is relevant to a similar story posted twice, and this rule of yours is listed nowhere in the guidelines, how can you justify taking down my comment? I'm honestly curious? This wasn't a comment that was incorrect or that the community felt was inappropriate. They highly voted it up in both stories.
It is founded by Facebook, but they will only have a %1 stake in it as far as I understand. Ultimately, it will be still controlled by existing governments, as they plan to back it by government issued currencies & the organisations that participate still have to respect government regulations. Besides, Visa & Mastercard already has this kind of dominance, except Libra makes it more transparent. So really, there's nothing to fear, at least if you already accept and abide by the existing financial system...
Btw, Libra is not a blockchain, but a distributed database. Think of it as Visa, Mastercard and friends coming together to create one database that they can update individually yet have the changes available to everyone while maintaining data integrity. Much better than the existing "black box" system, the new system is easier to audit.
>It will allow for a worldwide social credit system. If Facebook decides to remove you for wrong speak or wrong think, your money and many services will be inaccessible.
How is this different than what we have today with banks and credit card companies? The government can already freeze your funds. And now there are examples of people being censored online by being dropped by PayPal, which sets a scary precedent no matter how terrible their beliefs are.
>Further, they have no mandate like the central bank does to increase employment. Their mandate is to make money for corporations. This will lead to global social unrest.
That made me chuckle. The Fed has shown no concern for those who save by keeping interest rates so dangerously low for so long. The Fed is also here to make money for huge banks and corporations by making credit so cheap. In the long run this may not be the best for employment. Even if it is, it won't be for wages and wealth disparity.
>This will put some third-world countries in complete control by Facebook. I mean, whoever runs the currency, is the country.
Not much different than the role USD and the Euro play in developing nations today.
>Finally, the regulations on crypto and blockchain are still new. This is in Facebook's advantage as they can start lobbying to have these laws in their favor. They can argue for less transparency, as they are a bank, and this fits with their new privacy marketing message.
And what laws does Facebook plan to propose that are worse than the regulation (or lack thereof) that exists for the financial industry today?
>On the other hand, under no circumstances will I accept a world where Facebook started the one world currency.
I agree. I hope it is not Facebook that wins this game. But your other comments are very reactionary.
While the grandparent post may have misstated the threat, there is a real danger here.
It is not just a new style of credit card. And while it will act like a bank, it appears it will dodge regulation and consumer protection (limited as it is) under the word "cryptocurrency" or some other neologism poorly understood by the public and legislators.
Will Libra deposits be covered under FDIC? Will it be subject to closures when there is a panic? What rights do depositors have in the event of wrongful transactions?
So it's great if it allows people under repressive or kleptocratic governments more security and freedom. It's fine if it's just a toy to send money to friends. But it's another thing if it's just a bank with an unstated "depositor beware" philosophy. It'd also be a lot less worrisome if the company implementing it had a bit better reputation.
That's not Libra's use case. It is pegged to other assets; it is meant to be transactional, not held as a store of value.
>Will it be subject to closures when there is a panic?
Why do you consider that a good thing? Would you really rather have your money held by some bank in Argentina then?
Besides, the idea of cryptocurrency is that the money supply is not governed by policymakers, which will help to avoid the conditions leading to those kind of panics. In the case of Libra, it's pegged and its monetary policy is more decentralized than that of a central bank.
>What rights do depositors have in the event of wrongful transactions?
What rights do you think that you have today? You're being subject to wrongful transactions all of the time in the form of outrageous banking fees. Make no mistake, the cost of "wrongful transactions" is being foisted upon you, plus much more in the bank's own interest of making money.
>the Fed has shown no concern for those who save by keeping interest rates so dangerously low
There is no such thing as a dangerously low interest rate. The atmosphere won't suddenly catch on fire if you don't get a certain percent of risk free money. Additionally, "those who save" is not part of their mandate. They target unemployment and inflation.
>The Fed is also here to make money for huge banks and corporations by making credit so cheap.
Cheap credit isn't good banks anymore than it's good for individuals. Low interest means low mortgages, etc. If it's good for businesses, it's good for people for the same reason.
>In the long run this may not be the best for employment.
There hasn't been evidence otherwise so far. There has been plenty of evidence of money shortages causing lots of unemployment (see all busts of the early 1900s).
>Even if it is, it won't be for wages and wealth disparity.
High interest is absolutely terrible for wealth disparity. It's literally free money for people with money.
>There is no such thing as a dangerously low interest rate. The atmosphere won't suddenly catch on fire if you don't get a certain percent of risk free money.
You are completely delusional. There is a huge risk to global liquidity. We won't be able to rely on printing money to get us out of the next downturn.
>There has been plenty of evidence of money shortages causing lots of unemployment (see all busts of the early 1900s).
As Edward Thorp would tell you, bubbles thrive during times of cheap leverage (read: credit). Look at the crises of the last century.
>High interest is absolutely terrible for wealth disparity. It's literally free money for people with money.
You seem completely unaware that low interest rates are a tax on you in the form of inflation. The wealthy have enough to hold other assets that can more than offset this, and they can hold much more leverage. The average person, not so much.
On the other hand, is a social media platform and private company with a fairly bad track record of respecting human rights to privacy and democracy the best group to solve these issues?
Also, to be up front, some of these points I found on a thread early this morning and I copied it to a note pad for later, then went to sleep. When I woke up, the page had refreshed and I have no way of crediting the original author. But I think it's important to share, so I did. If you are the author, or know who wrote parts of this, please tell me and I will credit you/them.
After seeing paypal screw small companies for years just as a payment system/not quite a bank (In practice it is, but it is not regulated as such); I really don't want a company that is just as scummy with even more power.
Don't worry so much. You can stop shouting. This will lead to nothing because no one will use it.
Every attempt Facebook has made at commerce has failed miserably. No one trusts Facebook enough to purchase on Facebook, let alone use a Facebook currency.
Facebook, Snapchat, Twitter, et al. have all tried over and over again to get people to transact on their platform. Shop on Facebook, Buy on Twitter, Snapcash have all failed. Shopping on Instagram is a failure in progress.
All these companies want to feel like they are more influential than they are. They are really good at getting people to waste their time. Money, not so much.
> This will lead to nothing because no one will use it.
Every attempt Facebook has made at commerce has failed miserably. No one trusts Facebook enough to purchase on Facebook ...
I live in the "third world". People are not so discriminatory or probing about FB and friends as the west. In fact,(and regretfully), I daresay FB is viewed positively.
It’s not the same. The point, which is a valid point, is that this might never get traction because all their attempts at handling payment/transactions on behalf of other vendors on their platform has been nothing but failures. This isn’t far fetch to think that they are doing all this work and nobody will care to use it.
Yes we can indeed walk from the nordics to what we like to call "the continent". Which is odd when you think about it, because you'd think the continent would consist of what you can walk to.
When I first heard about FB's crypto plans, I got excited and concluded that it will be a success because of FB's user base. Now that I know better. Libra is set for failure. People will reject it indeed
They are going to get the regulators in their pocket and play ball with them. They will filter all transactions requested and provide a convenient place for governments to go for information or control.
Its a way for companies to capitalize on the cryptocurrency hype, without, ultimately, acting like a real cryptocurrency. Its going to be a giant bank that has government law enforcement and intelligence agencies as its clients and patrons.
This is sponsored by Visa and others. They are co-opting "cryptocurrency" for their own purposes. The goal is for this to become mainstream before real cryptocurrencies and take over before they can really get going for mainstream payments.
Your bug report is amusing, but isn't it unnecessarily personal? Couldn't you file a similar bug against the project that makes the point more concretely without the personal attack?
If he feels like I really attacked him.. I mean I can't do anything to someone who has that kind of control over the Dark Side of the Force. I'm not a Jedi or anything like that.
I will probably make another issue that is just depressing and concrete about the project and features no characters but it will be easier for people to ignore.
Facebook may be able to buy off US regulators, but they won’t be able to convince the EU.