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.
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...
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).
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.