Facebook Cryptocurrency Plan Faces Opposition in France
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Facebook may be able to buy off US regulators, but they won’t be able to convince the EU.
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.
Are you sure about this? I thought libertarians were against all institutions such as the state with power over people.
UBI is a socialist policy. It seems in total contradiction with libertarian principles to me. How is that possible?
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.)
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.
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.
So that's your years of relationship building, acquired in one go.
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.
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.
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?
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?
Facebook has many users. Each Bitcoin marketplace has only few.
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.
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.
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.
That’s kind of the point.
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).
More than that though, AML/KYC and any other checks deemed necessary can occur at almost every point of contact with fiat currencies.
https://libra.org/en-US/compliance-consumer-protection/#over...
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.
Can't find the source but it was reliable, Techcrunch or the New York Times I think
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.
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.
[1] https://en.wikipedia.org/wiki/People%27s_Bank_of_China [1]
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.
When a county doesn't receive tax it will be a very big problem.
So countries need to be in control of the flow of money.
It is also a very big problem is an outsider can change the value of your own currency. So you don't want US companies taking over your money flow.
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 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.
Anarchy is a voice against too much control but as a solution to world problems a very stupid idea.
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.
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?
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.
And maybe the Russian government doesn't want ordinary citizens to move money outside the country
They only lack of the extra-territoriality for their offices :)
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.
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.
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.
It is the same as people deciding not to vote and then realizing that the wrong candidate had won with devastating consequences.
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.
So don't be too sure.
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.
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.
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.
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.
Edit: also, much of the thawing land is the Canadian Shield, which is pretty useless for farming.
Technically, most of the Nordics is a peninsula and a large number of adjacent islands of various sizes, so it depends on your definition of course.
Hey there, Republic of Ireland would like to have a word with you :)
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.
I filed a bug report. https://github.com/libra/libra/issues/41
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.