France and Germany Agree to Block Facebook's Libra
reuters.com
reuters.com
Germany is very, very keen on preventing powerful entities from acting outside of regulation and similarly, if not more, on preventing a single entity to get in control of everything. This is largely due to some foobar in the last century, which I'm sure everyone is aware of.
So if Facebook, 10x of Germany's population comes around the corner with a proposal akin to "Hey do you mind if we just skip the paperwork part and just control currency, while actually being a social media tech giant" there going to be up against every trick in the book. This is not hypocrite behavior because Germany allowed some fun regional currency project no one is aware of some time ago. This is much more protecting the idea of the German society.
And personally, as a German, I'm really glad about it. You remember the hundreds of cases of worked with a scummy developer on an app once, now I'm blocked out of my email and all my files stories? Now imagine that, but with money and with a company who never even bothered to pretend it isn't evil - this is gonna be a no, thank you!
I'd also like to mention that certain entities operating outside of the state are precisely the sort of thing that can prevent the sort of tyranny that Germany enacted during the 20th century. Sometimes, and often, the entity capable of "regulating" is the tyranny. Imagine if Germany had had the capability to prevent payments to Jews, or track which households were spending more on food than they should and were likely harboring enemies of the state. I'm not saying Facebook needs to be the entity that does it, but monetary systems operating outside of the state could be argued to be one of the strongest weapons against tyranny.
I actually think this highlights one of the fundamental differences between Western liberalism and German schools of thought. Germany tends to fall back on the central authority, whereas liberalism thinks that the central authority is the single most corruptible attack vector.
This is in direct contradiction to your previous paragraph, unless such a system is inherently decentralized, and not controlled by a single entity (such as FB).
I'm not sure a union with a democratically elected parliament is comparable to a social media corporation which answers to its shareholders?
A has a democratically elected parliament
B answers to its shareholders
The original comparison read very much as whataboutism to me.
There is something incredibly shady about it, because inflationary monetary policy is inherently a regressionary redistribution of purchasing power and wealth due to Cantillon effects whereby those relatively closer to the printing press (governments, banks, and asset holders in roughly that order) gain a higher purchasing power than those at the very end of the chain which has traditionally been wage-earners and average workers.
There is no need to print money in a growing economy, it's purely ideology from the Keynesian economic establishment where they've somehow convinced the general public that it is crucial to have a steady inflation in an economy because otherwise people won't spend money or invest (which is a priori false, as time preference is a thing in both humans and firms). For thousands of years gold has been used as a monetary backing (which is deflationary by definition), and some of the highest recorded levels of economic growth in history has generally been slightly deflationary (the United States during the 1800s is a prime example).
There is, for a number of reasons, but not least of which is fairness. If I get a dollar, then the size of the economy doubles, my purchasing power as a fraction of the total amount of economic activity doubles. This creates wealth inequality over time, too. Likely to the benefit of the same people.
I hear you re: Cantillion effect, though I'm sure that could be solved with a targeted tax.
Most importantly, philosophically, nobody owes you a risk-free return over time on your idle, un-invested capital. I can think of no justification for why your dollar should be worth more in the future than it is today. At best, I could see an argument for the same amount, though I think a little bit less to encourage investment is a totally reasonable place to draw the line.
> ...some of the highest recorded levels of economic growth in history has generally been slightly deflationary (the United States during the 1800s is a prime example).
You mean the industrial revolution? I'd say there were externalities that affected that. Counter-point, the great depression.
You assume that as an economy doubles prices won't decrease. The natural tendency of a free market is a decrease in prices due to competition, technological innovation, and other factors. If anything, holding the same dollar will lead you to purchase more goods at a higher quality than before as the market develops and expands - a higher purchasing power.
Wealth inequality is exactly what is caused when you print money to match the growth of the economy due to the aforementioned Cantillon effects.
>Most importantly, philosophically, nobody owes you a risk-free return over time on your idle, un-invested capital.
There is nobody that is giving you that return. The so-called "return" is the tendency of a free market to lead to cheaper prices and higher quality goods and services. If anything, I can't see a justification to allow the public's money to decrease in value over time.
>You mean the industrial revolution? I'd say there were externalities that affected that. Counter-point, the great depression.
Yes, there were externalities that affected it, but the core point remains the same. Competition and rapid technological innovation lead to a decrease in prices over time. The Great Depression was not a consequence of a natural deflationary regime rather it was the consequence of extremely lose monetary policy during the 1920s ("The Roaring Twenties") and it would have resolved itself quite quickly but as letting people be unemployed is usually politically unpopular Roosevelt enacted price controls that extended the market correction process that would have otherwise taken a much shorter time than it did.
AKA, a risk-free return on your uninvested, idle, capital that nobody owes you. The poor tend not to have much savings, by definition, which means that all this win goes to the already wealthy. Your argument is simply that your dollars should be worth more later because you got your dollar first. That's not a good reason, IMO.
> If anything, I can't see a justification to allow the public's money to decrease in value over time.
Let's say you decide it should be worth the same amount forever. Fine, that still requires printing new money. All you're arguing now is the magnitude.
This is not true - saving rates were higher in the past before irresponsible monetary policy took over after the erosion of the gold standard.
>Your argument is simply that your dollars should be worth more later because you got your dollar first.
This is exactly what happens in an inflationary monetary regime, althought the difference is that the distribution of purchasing power increases is not homogenous in an economy rather it is concentrated on those who are either politically or economically well-connected, usually asset holders.
>Your argument is simply that your dollars should be worth more later because you got your dollar first.
How about not controlling the value of money and instead letting it reflect the general purchasing power in an economy?
This is a candidate for most tired meme on the internet and I really don't understand what it even has to do with this discussion as I've never met a household with a printing press (running the press is exactly what GP was referring to).
Germany is not perfect, neither in ideology nor in execution. Neither is the EZB or the EU, for that matter. But this is just bad faith arguing.
Ironic that aforementioned foobar in the last century was a governmental entity that existed entirely within the limits of regulation. Not to mention the completely reckless monetary policy of the Weimar Republic with respect to the Papiermark that arguably caused the rise of Nazi Germany.
Not to mention the fact that the German government around the second world war was completely different from the current German government in terms of the actual people making it up.
Is it 'ironic' when governments try to improve equal rights for men and women just because there is oppression of either of the two in their past? What nonsense.
This false equivalence borders on Godwin's law. Combine that with the 9/11 rhetoric in the US hearings and it's really quite telling how they get SO scared. Idk how far it's going to go, and it might not be Libra at all, but there is so so clearly big role for crypto currencies to play.
And, of course, the Ministry of Truth https://en.wikipedia.org/wiki/Netzwerkdurchsetzungsgesetz
This is a gross mischaracterization of what Libra is. Libra is a token that's backed 1 to 1 on some basket of currencies and mostly government bonds. The Libra foundation makes money by taking a portion of the investment return to fund themselves, much like a brokerage takes a bit of the return when they invest your cash account. Thats it.
I'm not super on top of a lot of the details here, but I thought Libra was like a currency. What investment return?
The users do not.
If the user gets no additional returns, then it's just a fee, no?
The users get the stablecoin and are resigned to only possibly trying to speculate on foreign exchange rate changes, which are entirely inferior to the other opportunities such that it shouldn't even be considered. Users only have the opportunity to be users.
Probably time to read the white paper again if you really want to have a more nuanced discussion.
The relevant law (art. 3 WZG[0]) requires persons to accept all banknotes (and up to 100 coins per transaction) as payment, but this only applies after a contract has been formed. It's perfectly legal for any store to indicate to customers that it will not accept large-denomination notes or cards[1]. If the customer is not willing or capable to pay using the accepted means of payment, no contract is formed, and the chewing gum remains with the store.
[0] https://www.admin.ch/opc/de/classified-compilation/19994336/...
[1] https://www.srf.ch/sendungen/kassensturz-espresso/geschaefte...
My personal legal asessment: If you were to form a contravt for purchase of goods and stipulated ahead of time that payment will be made in small bills (or electronic payments only), receiving payment with 1000.- bills would give the right to demand compensation related to handling large bills (security, verification etc.) due to the contractual breach, but it would not allow you to deny the money and demand payment as contracted.
[edit] The idea of a bank holding 1 to 1 reserves is called narrow banking.
> It’s a “narrow banking” model that would back its deposits with 100 percent reserves, located at what is deemed by nearly everyone as the safest of safe locations —the U.S. central bank
Ironically the US Federal Reserve tried to stop the creation of a narrow bank because it would undermine fractional reserve banks.
[0] https://www.brookings.edu/research/the-fed-wants-to-veto-sta...
> By fully backing each coin with a set of stable and liquid assets (described later) and by working with a competitive group of exchanges and other liquidity providers, users can have confidence that they will be able to sell any Libra coin at or close to the value of the reserve at any time. [0]
They'll fund expenses from the return of the investments.
> How will the reserve be invested? Users of Libra do not receive a return from the reserve. The reserve will be invested in low-risk assets that will yield interest over time. The revenue from this interest will first go to support the operating expenses of the association — to fund investments in the growth and development of the ecosystem, grants to nonprofit and multilateral organizations, engineering research, etc. [0]
Brokerages do this as well and earn most of their money this way (people keep cash in brokerage account and brokerage invests and earns interest).
> 57% of Schwab’s revenues are from net interest. The firm could literally give away every other service; discount the mutual fund fees to zero, do away with commissions, etc etc, and they would still be profitable. [1]
[0] https://libra.org/en-US/about-currency-reserve/#the_reserve
[1] https://www.kalzumeus.com/2019/6/26/how-brokerages-make-mone...
But even assuming it was a full reserve, I don't think its fundamentally different enough to be allowed to skirt the existing laws.
It's different enough from banks because its matched one for one with some asset. It's essentially a passthrough investment. The reason banks are so highly regulated is that they participate in fractional reserve banking where they take in deposits and invest in highly risky assets. That and deposits are guaranteed by FDIC or similar agencies.
Should Starbucks be regulated as a bank because they let you prepay for a cup of coffee?
Well this might just be where we simply disagree but I would say yes. Those Starbucks cards are often used as a way to launder money from country to country. You can't transfer balances from one individual to another as far as I'm aware so it's not nearly as problematic, though.
Except it's not. Well, maybe it is "generally", but fractional reserves in particular are, by definition, central bank money, and only central bank money. So, strictly speaking, cash or central bank deposits. Not bonds, not loans, not equity. Only central bank money.
> It's different enough from banks because its matched one for one with some asset.
In other words: It is exactly like a bank. Every loan any bank ever makes is matched with some asset, if it weren't, they'd be called gifts and not loans.
> The reason banks are so highly regulated is that they participate in fractional reserve banking where they take in deposits and invest in highly risky assets.
That doesn't even make sense. How would the fact that a bank has (supposedly) lower reserve requirements mean that "regulation" is required more? The whole point of regulation and oversight is to make sure that the minimum reserve is there, not that there isn't too much reserve, and if a bank supposedly had a 100% reserve requirement (because that is what they promise their customers, say), that would , if anything, make it even more important to check that that is actually true.
The whole reason why all of that regulation and oversight exists is not because banks have promised their customers too little, but because banks over and over and over told their customers one thing, but actually did something completely different, and ususally that means something a lot more risky.
The fact that Facebook promises to do something really good is exactly zero reason to do away with mechanisms that exist to make sure that promises are held.
This was true 200 years ago not anymore. https://en.m.wikipedia.org/wiki/Money_creation#Credit_theory...
Only 3% need to be matched IIRC
> When a bank issues a loan of $1000 to a customer, they debit the customer's loan account with $1000 and at the same time they credit the customer's deposit account with $1000, ready for using. The bank now has a new asset of $1000 and a new liability of $1000.
So ... do you have a source that supports your claim rather than mine?
In Germany, you might actually need a permit from the financial regulation (BaFin) if you offer gift or prepaid cards, at least if you store the value online (and maybe some other conditions).
Yes. Including how the funds in the pre-paid card are managed and invested, and certainly including all the rules about when the user is allowed to reclaim their money.
If I were a country's finance minister, this single paragraph would be enough to get me to say "no".
This currency generates returns, which we don't see, and we don't control the allocation of. basically, it's slowly bleeding money out of the countries that use it, though accumulation of capital and capital investing.
Let's say I'm a country, say, not the U.S. Could you see me having a problem with having my currency backed by a U.S. corporation, who's reserves are held in the U.S. central bank?
That's... misleading? When you put 1 Euro into the bank, it allows them to hand out credits (promises) of 20 Euro. They don't just loan out what you paid in. They create their own money.
no, they don't.
still need an internet connection and two person with a libra account.
Anyway, you can do the same thing with paypal...
Yet in its short lifetime, Facebook has been able to prove itself very untrustworthy towards consumers.
It's not too big to trust, it's just untrustworthy. The fact that it's also big, makes trusting it an even worse idea.
And that architecture is decided by the Libra foundation, therefore they control currency.
They will break this promise to maximise profits, and there is sod-all you can do about it.
I think Monsieur Macron has put this onto the agenda when Libra was announced. I'm not disagreeing with the decision and have similar concerns as you, but I'm still uncertain whether the state should even have the ability to block these and other things in general. Most of all, I miss a British voice here (as, sadly, not very much longer an EU member), and see this as a preview for where things are going with France getting more weight as the UK is leaving.
I don't think there is much chance of Brexit this year, and a pretty good chance that it will never happen.
Mind you - always a chance that we'll simply get thrown out for being incompetent at running a country...
You go after Jewish people as a class, rather than specific institutions controlled by Jewish people, which I think is bad faith argumentation. If you criticized Israel, for example, or some specific set of banks I would be ok with that.
I admit I would not have the same reaction against another person criticizing “white people” as a class. But I believe I am justified in that because whiteness is not an ethnicity, it is the practice of denial of ethnicity. That makes it a specific institution not a group of people.
I am vulnerable also to accusations of hypocrisy because I sometimes criticize men as a class. Maybe that should be out of bounds, (probably is out of bounds on HN) as men are clearly a real biological group and not a concept.
However, masculinity (as opposed to manhood) is not a biological reality, it is a system of identity constructed to hold childbearing women in a sex class (i.e. submitting to control of their bodies). So to the extent that men identify with masculinity as opposed to just having a penis and some hormones, I would say we are also open to being attacked as a class, and lose our protected status as an actual “tribe” of people.
Although as a side note, I do suspect that when masculinity was originally invented it was quite possibly an identity constructed for the protection of men as an actual ethnographic class of underserved people. Pregnancy does confer actual power and patriarchy I suspect was invented to counterbalance that. However I don’t believe it functions that way today.
I suppose you could argue that Jewishness has crossed that rubicon but I don’t see how you could credibly do without getting into holocaust denial which I would also put in the bad faith category.
Serious apologies to any Jewish people reading this who may feel by engaging these questions I am being blasé about the threat of antisemitism. I really don’t want to do that, but I also want to hold a hand out for people who are having a hard time understanding the reasoning behind the rules of liberal discourse.
> But I believe I am justified in that because whiteness is not an ethnicity, it is the practice of denial of ethnicity.
I fundamentally do not understand what that means. Surely I don't have a choice but to be white? What am I denying? It's true that whiteness is not an ethnicity, since Russians and white Americans are surely ethnically distinct - more so, I think, than white and Asian Americans or white and Asian Russians. But beyond that I can't make sense of your sentence. I wonder if it depends on a particular national interpretation of "white" that cannot be accessed by all people who might want to describe someone as "white". But it seems opaque to me.
Are you an anthroplogist?
I bet not.
Many white Americans have slavic blood just like russians.
Is whiteness a social construct or a genetic one?
Just to revisit my original comment you are referring to:
>Yeah it is very peculiar how the British elites was able to establish the Mandate for Palestine to give Jewish people their own state but haven't been able to establish something giving British people their own state even after it was explicitly requested.
I am referring to the state of Israel here, though I don't have a disagreement with Israel's existence nor with the Jewish people themselves in whole or in part, instead I am criticizing that the British elites do seem to have the ability to give a people their own state (as they did in the example of Israel here) however they are reluctant to extend that same work towards the British people. So here my discussion of Israel and Jewish people is not an objection to them in whole or part, but rather an example of what can be accomplished, so as to acknowledge but stave off some arguments that throw Brexit up as if it were somehow not possible. In hindsight, I see how the explanation I gave here would have more effectively prevented any interpretation of animosity, so thank you for making that thought clear.
>I admit I would not have the same reaction against another person criticizing “white people” as a class. But I believe I am justified in that because whiteness is not an ethnicity, it is the practice of denial of ethnicity. That makes it a specific institution not a group of people.
I think I agree about what whiteness is but for different reasons, mainly because the only concrete definition of "whiteness" that I can surmise from how "white people" are treated is "white people are the only unprotected class in law and are the only ethnic group of people ineligible for any race or ethnic protections or ethnic/racially based government programs, academic opportunities, or civil rights protections". Whiteness is imposed on to "white people" by society who say that they can not apply for any protection or benefit based on their white status while all other race or ethnic groups can.
>I am vulnerable also to accusations of hypocrisy because I sometimes criticize men as a class. Maybe that should be out of bounds, (probably is out of bounds on HN) as men are clearly a real biological group and not a concept.
>However, masculinity (as opposed to manhood) is not a biological reality, it is a system of identity constructed to hold childbearing women in a sex class (i.e. submitting to control of their bodies). So to the extent that men identify with masculinity as opposed to just having a penis and some hormones, I would say we are also open to being attacked as a class, and lose our protected status as an actual “tribe” of people.
I think you've brought this up as an example of talking about people in groups and how some groups can lose protected status even if membership in that group is determined biologically. While I agree that there are biological reasons that women and men sometimes need different accommodations in both private and public institutions, if some group is being declared unworthy of "protected status" then I am weary of what you mean by that.
>Although as a side note, I do suspect that when masculinity was originally invented it was quite possibly an identity constructed for the protection of men as an actual ethnographic class of underserved people. Pregnancy does confer actual power and patriarchy I suspect was invented to counterbalance that. However I don’t believe it functions that way today.
That's an interesting analysis, clearly a Marxian perspective in how you tally up what attributes give who power and how social institutions can be counterweights to that power. However if you historically look at the founding of major institutions the fundamental units are the families/communities counterbalancing the power of other families/communities, not sexes counterbalancing each other. Democrats vs Republicans, Labor Union vs Management, Army vs Army, State vs State, Religious institution vs Vice, Religious Institution vs State, Religious Institution vs rival Religious Institution, Academy vs Ignorance, Media viewpoint vs Media viewpoint, etc. etc. etc. The logistics to even support the idea of men and women wandering freely such as stable and safe states plus enough economic opportunity for men and women to wander around freely independently from the families and communities they grew up in is a fairly recent and I think still tenuous phenomenon.
>I suppose you could argue that Jewishness has crossed that rubicon but I don’t see how you could credibly do without getting into holocaust denial which I would also put in the bad faith category.
I don't think Jews should lose any "protected status", instead I am usually point out that Jews are showing us what is possible for a community to accomplish and other groups should be able to follow the same roadmap.
>Serious apologies to any Jewish people reading this who may feel by engaging these questions I am being blasé about the threat of antisemitism. I really don’t want to do that, but I also want to hold a hand out for people who are having a hard time understanding the reasoning behind the rules of liberal discourse.
Why do you feel you should apologize to the Jews for engaging in the free discourse of your ideas? Do you feel they may enact retribution on you? Do you feel the same about other groups like the men you discussed before?
HN mods are not here for justice, they'll never admit they are wrong.
Is the polite and free discussion of ideas not justice?
Please see https://news.ycombinator.com/item?id=21003570 and https://news.ycombinator.com/item?id=21003591 for more.
My reading of ECB publications makes me believe that they don’t want to block these.
Ultimately, governments are mandated to protect the wealth of their electorate. A system in which they have no recourse, even indirectly, against volatility (the preservation of wealth) and stability (the preservation of payment services) is one that they must supersede.
SWIFT was forced to block transfers to Iran. Libra is like SWIFT, but with more control, as they also act as the RTGS (real-time gross settlement system).
Imagine if your country’s currency stopped working because it was added to sanctions lists. Or got increased fees.
A private company is ultimately subdued by the government of the countries it is incorporated in. They apply laws and executive orders against them. This kind of power asymmetry between countries is dangerous.
People may decide against that.
Who said anything about a primary medium of exchange? Should dollars be disallowed as well? How about bitcoin? Starbucks gift cards?
It's not going to be a very amicable discussion.
2. No. I don't think its available yet. Its not really meant to be a speculative investment since it's backed by a basket of stable currencies. Although it may be like a closed-end mutual fund where the investment could trade below or above net asset value. But I wouldn't recommend speculating on some price increase even if it takes off
3. No, I'm just interest in cryptocurrencies read the white paper [0]. I suggest you do the same. It's pretty interesting. I do have a fair bit of free time though
Their blockchain neither has block nor chain as I seem to recall. If the company is already lying in their whitepaper, what exactly are you expecting from the real thing?
Doesn't mean its (always) sensible to accuse people you disagree with of course.
Monetary policy is entirely about currency control for inflation, etc.
There are also small countries that are pegged to the US dollar.
When you are a small-potatoes nation-state, and have a non-diversified or small economy, it is a great idea to use a larger, better established, currency.
* It's more stable * Trade is easier * More than 3 banks accept your currency!
The incentives of the nations controlling the euro are well known to Montenegro, and they trust that those countries will keep the euro stable.
Libra is a whole different ball of wax. It's not just a currency. When you use it, you are tied to Facebook's terms of services, Facebook's desires, and Facebook's fate. Your individual citizens could be locked out of the economy for reasons that have nothing to do with your nation's laws.
If Google and Apple wouldn't agree to use Facebook-dollars for all their transactions, I don't see why a company would agree to.
There's a big difference between having a currency pegged to another, and not actually having a currency at all, and using physical foreign currency for everyday transactions.
Pegs can be broken and may be hedged with FX futures.
The second situation is a much stronger existential commitment, which makes it more reliable and predictable. Reinventing a new national currency is a high barrier, which cannot be hedged directly in the FX markets (although sovereign CDS might be close enough).
Not sure what you’re trying to get at.
They were never fully in on the EU as France and Germany are ( i'm Belgian).
So i'm not sure if a agree as much with your opinion as you want :)
it could have been a better, less irrational, EU partner (it was never a full member)
"Wait and see" is a good approach to see whether your new electric city bus line is working or whether people prefer your website logo in red.
You can never, ever take back what became basic necessities on a nation level while being even remotely democratic. Once people have it, they won't give it back.
And you seriously think Facebook is to be given any such power, even after Cambridge Analytica? We're talking about currency, and billions of people. Lifes are very much at stake.
But sure, let's wait until Facebook uses Big financial data to get some populist party manipulated into power and a mere few thousand people die from the consequences, than be all enraged on reddit for a week and unable to change anything? I'll keep my typical German mindset, thanks
Crypto currencies are not going away and both Getmany and France are hurting their own entrepreneurs.
If Libra is going to be more economically than a typical bank, that will take many years and give plenty of time to react in case of problems. Also, it should first be up to the people for themselves to decide what means of payment they are using. The government should only intervene when the market fails.
In the beginning, it will be optional. But if/when everyone starts using it, most people won’t have a choice.
Protesters in Honk Kong did that too, to not be identified and tracked.
Protesters is US did that too to buy subway tickets, again, to avoid being tracked.
It's ok to pay in cash.
It's not that we go around with leather suitcases full of cash to buy tons of cocaine...
Yes, it's a small individual loss (not being to invest in Libra) but probably a big collective gain.
Anybody who creates a product tries to persuade people to use their product. You can be a cynic and just attribute ill intent of basically everything but it's not really productive
Facebook doesn't control Libra. They have a non-controlling stake in the Libra Foundation, a non-profit.
That's fundamentally anti free market.
What you’re advocating for is a market with very clear boundaries, where everyone has equal access to the market but no one is allowed to do the things outside the market.
So it’s a “free market” in that no one has special powers. But it doesn’t make my American “freedom hairs” tingle because there’s a ton of stuff the government is telling you not to do.
I won’t make any argument as to which kind of freedom is more important in this case. But I do want to suggest that the more stuff you put in the “not allowed because the market can’t be administered fairly” bucket, the more of your GDP you cede to criminal organizations.
Because once it’s illegal, that’s just a big monopoly you handed to organized crime. And yes, organized crime does exist in Europe, and does control money supply.
So you have to be careful, there’s a devil’s bargain in both directions.
1. Since when is a currency a "product"? Did I miss a macroeconomics memo? — This statement is antithetic to the structure of modern economies, or to Facebook's claims about Libra for that matter.
2. As for cynicism, if you look at Facebook's history and mindset, their decisions and policy... I feel like "cynicism" qualifies as an appropriate response. — for reference: an inclination to believe that people are motivated purely by self-interest; skepticism.
Capital controls have historically been associated with despotic governments.
Why shouldn’t I be able to put my wealth where I want ?
Large multinationals have more power than those governments. It does not matter how their electorate votes.
That part sounds good to me - tying together the international money and trade system has reduced the threat of war.
But that argument doesn't imply the need for a foreign (or domestic) corporation to administrate your currency.
Once Godwin's law became a meme it outlived its usefulness. Yes, people tend to hyperbolically compare things to the Nazis. But the Nazis were a real thing that happened in the real world, not some platonic ideal of evil to which nothing compares. Shutting down any comparison to Nazism is absurd, doubly so when discussing German policy.
Germans don't want uncontrolled groups accumulating power precisely because it could lead to a situation like Nazi Germany
Uh huh. Really. Germans totally hate uncontrollable groups trying to take over Europe?
Please spare me sanctimonious Germans claiming some sort of moral high ground they don't have. In fact from a British perspective it appears Germany has learned nothing from its experiences at all. It's actually quite amazing how desperate they seem to repeat history over and over.
Germany is by far the biggest and staunchest supporter of the EU, which is literally an uncontrollable group accumulating power as fast as possible. It is partly because of hardline EU supporters like Merkel and Macron that both Switzerland and the UK are hurtling towards all out trade war with the rest of Europe, and why UK/EU talks have gone nowhere. The EU is building its own army, its democracy is a sham and it treats its own citizens with contempt, as can be seen in this remarkable blog post by the Commission (it has to be quoted now because the backlash was so huge it got taken down)
https://www.techdirt.com/articles/20190215/18005841607/eu-co...
The reason the French and German governments hate Libra is threefold:
1. They are very easily manipulated by their local press barons who perceive Facebook and Google as business threats. See the old link taxes that became Article 13 at the EU level.
2. They are institutionally cynical about their own citizens, who they see deep down as basically being stupid sheep. This shines through in their writings (see the link above) but has the more insidious effect that nobody in EU power structures really believes their own country could ever create a Google or a Facebook. So from their perspective, constantly attacking these firms is pure win: it creates an external enemy in a world without many, and these firms are usable as cash machines to keep the EU budget afloat.
3. One way the EU controls its southern member states is by letting pro-EU governments effectively buy votes by running huge deficits, financed by money printing by the ECB. If a country elects an anti-EU government, the ECB threatens to turn off the money supply until they do (this is very visible in Italy).
In other words the EU's power comes at least partly from manipulating the currency supply. This is bad for the typical German citizen who tries to save money, but good for the project of uniting Europe under a dictatorship:
https://www.theguardian.com/business/2019/sep/08/europe-cent...
Germany has recent experience with governments that try to take over Europe and governments that manipulate the money supply for political purposes. Indeed ECB policy is very unpopular with the Bundesbank and German government. But they can't do anything about it because their ideological commitment to EU domination overrules everything else, and the head of the EU Commission controls the ECB.
Ultimately, Germany's experience with hyperinflation, Naziism and the DDR has apparently left it convinced the moral thing to do is support a power structure that's taking over Europe as fast as possible, printing huge sums of money to do so, which is engaged in a power struggle with Britain, and which is run entirely by people who aren't elected.
As someone living in smaller country, we now have our voice heard more than before, and other benefits of EU far outweigh the downsides.
> They are institutionally cynical about their own citizens, who they see deep down as basically being stupid sheep
Yeah Trump and Johnson are so much better \s. Every country has politicians like that.
And yes I know lots of people living in the EU think it's great. Lots of people living in the USSR thought it was great too, as can be seen from the opinion polls showing how many Russian think Stalin was their greatest leader. That doesn't change the nature of what these systems are.
And Boris (among many others), more or less engineered the whole brexit so he could gain power, if that fails he is done. He is doing it because he bet his whole career on it, and has nothing to loose.
And as someone who lived (although only for about 12 years of my life) behind iron curtain. I can assure you most people didn't think it was ok, and we are paying attention so we don't end up in the same situation again.
Part of what we usually want from our politicians is to filter what people want a little bit and remove some of the evil and stupid. I know, then we don't get exactly what we want. But if you ask exactly what people want, about 90% of it ends up being "people not like me to suffer more", and if you run everything based on that, all you get is everyone suffering more.
It's tragic really, since the EU cannot move because it's bound to the will of the member states and their people - and the UK cannot move because it's bound to the will of its people (by which I mean the people of Northern Ireland, not the referendum).
Now the UK press seemingly wants people to believe that the "the EU" can just decide on a deal, independent of the interests of its member states. And that sadly will burn itself into the minds of many Brits (at least the leavers) as a story that the EU bullied the UK without any reason, just to be mean.
And by the way, none of the things the UK is being asked to agree to have been presented as requirements to other countries. The only thing the UK really wants is a free trade deal. That is explicitly not on offer from the EU: ruled out immediately. That's available to countries not geographically near Brussels, but not to the UK.
And that sadly will burn itself into the minds of many Brits (at least the leavers) as a story that the EU bullied the UK without any reason, just to be mean.
The British press, despite what you may believe, is mostly pro-EU. Many Brits have concluded that about the EU all by themselves, based on the actual actions it's taken.
How are you measuring that, exactly? Here is a reasonably quantitative analysis:
https://rightsinfo.org/app/uploads/2016/06/Screen-Shot-2016-...
from this article:
https://rightsinfo.org/brexit-five-lessons/
> Many Brits have concluded that about the EU all by themselves, based on the actual actions it's taken.
I don't know how many Brits have reached their conclusions about the EU "all by themselves", without basing their information at all on what the media and UK politicians have told them.
It's also worth remembering that broadcast media is largely pro EU, even though it's theoretically meant to be neutral. I don't know many who really believe it is though.
At any rate, it's very easy to get news very slanted towards the EU in the UK if you want it. The fact that there's alternatives is different to in most of Europe, I've noticed, where the media is near universally pro EU and anti-member state. At most in Germany the ECB gets criticised.
that you brits are wrong.
300 millions EU citizens know that.
not because of inflation though.
if you wanna be historically accurate.
No single event in history causes dramatic changes, everything is connected.
There was a process that brought nazis in power, and it wasn't the hyperinflation alone, there were a lot of different factors acting together, not last the example of Italian fascism from Mussolini and the idea of governing the masses by eliminating the opposition through violence and obtaining absolute power, while maintaining the illusion of a democracy.
The Night of the Long Knives is more important than the hyperinflation to understand the rise of nazism in Germany.
You might mean that some Germans don't like CC and prefer cash for privacy reasons. But that is a personal decision.
With a Girocard, you have to go to a specific brand of bank or hope they are in your "cash group" or else you will pay a hefty fee.
But some banks offer to withdraw from any ATM using their VISA CC with no fees at all.
For years I've been using this to get cash without much of a hassle and pay for stuff I'd otherwise probably pay for with my Girocard.
Makes me wonder if my cash withdrawals are counted as CC transactions?
This is just my personal observation. Among the western European countries, German has the smallest level of adoption of credit cards. The French, the Dutch, the Swedes etc love their cashless nature of credit cards, the Germans not so much.
Furthermore most of the credit cards offered by the German banks are actually debit cards.
It boggles my mind, but "majority" of the German population has a preference to Currywurst ( https://en.wikipedia.org/wiki/Currywurst ) - is this also "beyond a personal decision" ?
If you have a reference to German government pursuing an anti credit cards policy - please provide it here.
This paper (0) is a good write-up on how the card systems works in Germany.
(0) - https://refubium.fu-berlin.de/bitstream/handle/fub188/22957/...
edit:updated the link
Hotels or car rentals which want to block a certain amount on my card as guarantee are one. Other than that I never needed a credit card.
In case of an emergency most bank accounts in Germany can go into the negatives, I guess making minimum payments on a credit card is cheaper but that style of life isn't at all common in Germany.
Not in my experience in the least bit. Germany was the only place that I’ve been where there were so many non-credit card restaurants etc. I was traveling for work in Bavaria and baden-württemberg. It was an issue and we had to make sure I selected the right place to use my work cc.
I took some personal time in Munich and most of the places I went were cash only. 2 students, one from Finland another from the Netherlands complained about the cash issue and forgetting it multiple times. Leading to interesting situations.
Sure, the ice cream stand at the swimming pool only accepts cash, as does the local discotheque, but restaurants? Never a problem.
By contrast, in New Zealand even most farmer’s market stalls and pop-up espresso carts presume that contactless will be the main means of payment.
Even the cab to the Munch airport would only accept cash. I had to walk across the airport to get it. His payment app was “not working”.
In Stuttgart it was only the smaller places. Although we made sure find places that took corporate Amex using a website.
But let me just say that, when I was at Square this was common knowledge and why that wasn't the first market we looked at.
If you watched the news some time during the last 30 years you get quite a different impression. The German government parties, particularly CDU, CSU and SPD, are _constantly_ trying to grab power and erode our civil liberties; They barely do anything else. If I had a euro for every law that those three passed that was obviously unconstitutional I'd have enough money to bribe my own CSU congressman. The only problem the German government has with Facebook Libra is that they themselves don't control it.
I don’t see why this is hypocritical, a problem, or even an argument. The CDU, etc... are elected by the German people and hence are designated by the people to control state power. It’s their job to control these kinds of things.
Facebook is elected by no one, represents only Mark Zuckerberg’s interests, and is accountable only to him.
No, that’s not a given. Many people don’t agree that it’s the government’s job to decide what kind of currencies you’re allowed to hold and trade.
(Indeed, the German Constitutional Court generally rules on the constitutionality of power transfers to Brussels based on the degree to which the control of said powers is democratic.)
Germany's outsized influence came 25 years ago, when it had the dominant part in writing up the rules and powers of the ECB.
Buboard suggests that Germany exerts coercive monetary pressure over some other Eurozone countries. That crosses the line for you?
If Ireland had independent monetary policy maybe it could have lanced the bubble earlier and not been hit with 14% unemployment after the end of the Celtic tiger era. If Greece didn't have Merkel on the other side of every table, it could have attempted something similar to the Plano Real, rebasing its currency completely and restructuring its society through default.
Or maybe they would be way worse off without Germany. Who knows? A claim that Germany has an outsized impact on monetary policy, at times to the disadvantage of other negotiators, is certainly debatable! But it's not the sort of thing you can brush aside ad lapidem. Especially not in the context of this farcically hyperbolic thread.
There are good reasons why the UK declined to join the Euro.
Same happened for other countries accessions. And of coures France and Germany bent the EU budget rules all the time too. Then when things started going poorly in Greece, the gang kicking the fallen guy promptly forgot about this.
(To be clear, many of the rules reflected a irrationally strict anti-debt anti-inflation puritanism to begin with, and the problem was more in the rules than their lack of enforcement)
The entire idea of anti-trust (and frankly, the premise of most western democracies) is to prevent the over-concentration of power.
Facebook is the most powerful private entity on the earth right now, far more powerful than most nation states. I'm not sure that we as a society have ever dealt with a non-state actor this powerful before.
Germany's response of essentially "yeah no, we're not letting Facebook make money here," seems prudent to me.
This is hyperbole at best. Facebook does not have an army, weapons, or literally anyone that would be willing to die or even be physically put out to defend it.
I’m no Facebook fan, but let’s not let Facebook hysteria overrun these comments.
“This is hyperbole at best. Facebook does not have an army”
Op was pointing out that power != war with guns
“Facebook is the most powerful private entity on the earth right now”
The comment was how power could be achieved via other methods of warfare-including the ability to shape conversations.
Another word for this would be competition. He has a point.
The ability to shape conversations or to compete is not the same as making war (or you are relying on an idiosyncratic definition of "war").
War (Noun) " - a state of hostility, conflict, or antagonism
- a struggle or competition between opposing forces or for a particular end
- a struggle to achieve a goal: War (Verb): " - to be in active or vigorous conflict
- to carry on active hostility or contention
"
The point still stands. War is an isomorphism for competition, conflict and tension between parties. One could probably use something like category theory and prove it.
References:
> Data has surpassed oil as the world’s most valuable asset. It’s being weaponized to wage cultural and political warfare. People everywhere are in a battle for control of our most intimate personal details. From award-winning filmmakers Karim Amer and Jehane Noujaim, THE GREAT HACK uncovers the dark world of data exploitation with astounding access to the personal journeys of key players on different sides of the explosive Cambridge Analytica/Facebook data scandal.
http://content.time.com/time/covers/0,16641,19960715,00.html
Was that an act of war against democratic Russia?
https://en.wikipedia.org/wiki/Facebook–Cambridge_Analytica_d...
"The governments of India[30][31] and Brazil[32][33] demanded that Cambridge Analytica report how anyone used data from the breach in political campaigning, and various regional governments in the United States have lawsuits in their court systems from citizens affected by the data breach.[34] On April 25, 2018, Facebook released their first earnings report since the scandal was reported. Revenue fell since the last quarter, but this is usual as it followed the holiday season quote. The quarter revenue was the highest for a first quarter, and the second overall.[35] In early July 2018, the United Kingdom's Information Commissioner's Office announced it intended to fine Facebook £500,000 ($663,000) over the data scandal, this being the maximum fine allowed at the time of the breach, saying Facebook "contravened the law by failing to safeguard people's information".[36] In March 2019, a court filing by the U.S. Attorney General for the District of Columbia alleged that Facebook knew of Cambridge Analytica's "improper data-gathering practices" months before they were first publicly reported in December 2015.[37] In July 2019, the Federal Trade Commission voted to approve fining Facebook around $5 billion to finally settle the investigation to the scandal, with a 3-2 vote.[38] Facebook established Social Science One as a response to the event."
[1] https://www.washingtonpost.com/news/monkey-cage/wp/2018/03/2...
How could anyone besides them prove effectiveness or ineffectiveness of this campaign? I don't think it's possible. At the very least, the side they supported won (Brexit) and they should not be trusted.
Leave.UK was accused of violating electoral law. I believe the Electoral Commission has now dropped its investigation.
Incidentally, to break UK law, you usually have to perform the violating act in the UK (we have a few laws that involve extraterritoriality, but they are far and few).
Faceache barely does anything in the UK. They apparently make no money here; they don't sell stuff (not even advertising - that would be the Republic of Ireland). CA collected data on US citizens; that's legal here (and would have been of very little interest to Brexit campaigners). As far as I know, nothing CA did violated UK or EU law.
You say "the side they supported won (Brexit)". Do you mean that Faceache supported Brexit? I don't think they had a dog in the race at all. Or do you mean CA? It's been argued that CA took money to provide services to Leave.UK, but that's not the same as saying they supported Brexit.
Trying to "swing elections" is legal in the UK. In fact it is encouraged; people who successfully swing elections often get appointed to important positions such as Prime Minister. It's completely legal to hire polling companies to help you better understand the voters. It's completely legal to hire advertising companies to promote the electoral outcome you want promoted.
Now you are speaking of trust; of course, I trust neither CA (now defunct) nor Faceache. But Faceache did not drag my country into wars in Iraq, Libya and Syria. Faceache did not have that much power. The UK joined those wars largely because of diplomatic pressure from the USA - a much more powerful entity than this rather tedious online advertising company.
From what I have read, and despite their bragging, CA wasn't even helpful to the Leave.UK campaign. Their data wasn't relevant, and anyway Leave.UK didn't have the organisational capacity to make use of whatever data they could offer.
https://www.theguardian.com/politics/2018/may/11/leaveeu-fin...
You are correct that they haven't (been charged with having) broken electoral law in the UK, but they have broken data protection laws in relation to the information which was then used by Cambridge Analytica:
https://www.theguardian.com/technology/2018/jul/11/facebook-...
Whether that information was then used by Cambridge Analytica as part of a Brexit campaign is open to more questions.
Facebook is an echo chamber. People don’t go there to be informed; they go there to validate their already held beliefs. Given the large ideological chasm between the two candidates in the 2016 election, it defies logic that even a single voter was swayed or chose not to vote at all based on ads they saw on Facebook.
https://www.washingtonexaminer.com/weekly-standard/the-elect...
Of course it's impossible to say whether Trump would have won even if he hadn't spent any money on Facebook ads, but we're talking about a campaign that spent hundreds of millions of dollars in total. If this amount of money doesn't include enough to influence 78k people to go out and vote for a specific candidate, then we might as well give up on the very concept of advertising.
Now whether things should be this way am not sure, but a nation simply paying its debt off without significant changes to the role debt plays is not the answer.
Western democracies historically have been party to increasing the power of private companies through government protection from competition (corporate welfare). The first example that popped in my head was the provision of prison labor for U.S. Steel through convict leasing.
There are numerous examples though, link below from Mises (admittedly a source with a conservative bias, but theres still good info there).
https://mises.org/wire/government-created-monopolies-are-eve...
It would seem to me that governments provide preferential treatment to private companies when it is beneficial for the government and they provide roadblocks and difficulties to companies who would be detrimental to the government. This is of course a generalization and not a hard-and-fast rule that explains every instance of government behavior when viewed in respect to a private company.
> I'm not sure that we as a society have ever dealt with a non-state actor this powerful before.
Amazon and Google being of somewhat similar or greater power at least tempers down that statement. And unlike Facebook they have really good reputations outside specific parts of circles like the tech circle.
To me that signals they have less 'control' of the distribution of information on their own platform. It's debatable who could wield more social influence, Google or Facebook. On me, it'd certainly be Google, since I use about a dozen google products (Chrome, Gmail, Search, Mesh, Calendar, Analytics, Voice, Android, Scholar, Cloud, Maps, etc.), and zero Facebook products.
There are benefits and drawbacks to social media/everyone has a voice. On a benign level, the NYTimes released a story misinforming its readership that Apple was proactively promoting its own apps. This was cleared up on Twitter by @drbarnard whose view was promoted via Stratechary.
I realize there is a lot more complexity to nation-states creating false narratives around China or Hong Kong protests, but on a basic level, I believe social media allows a quicker iteration cycle to correct misinformed views with the drawback of initial misinformation traveling at a greater velocity.
In many ways, you can get a more informed and accurate view of the situation in Hong Kong today if you have the propensity to avoid overreacting to the first piece of information and developing a skillset for finding the right person to listen to.
No it isn't, not even close. At most it's the third most powerful tech company, after Alphabet and Amazon.
Certainly purchase data is very powerful (ask supermarkets!), but I think it pales in comparison to the breadth of data Facebook and Google collect.
I might also be biased towards underestimating Facebook since nobody in my social circle actually uses Facebook or Instagram. I guess Facebook is more powerful than I gave it credit for, though it still pales in comparison to Alphabet.
The east India trading company and the hudson's bay company as well as I'm sure some others were as large as or larger than some state actors of their time.
“Facebook is the most powerful private entity on the earth right now, far more powerful than most nation states”
Op did not clarify his reasoning. Though I have thought about this and here are mine.
If strip down a “nation state” to its bare essence, it is an idea. Lines drawn on a map, and symbols(flags, anthems etc). Add in the government directing education, and we end up with masses that can be influenced to behave in specific ways. i.e socialisation and sense of identity.
Now, we know that government plays a significant part in the country and in the world.
Now let’s consider FB. FB has by far the largest network of people that are connected in one massive network. I suspect Information (memes) could spread much faster on Fb, Whatsapp and insta than they could prior to these. Even email was never as fast. Since FB has control of the network without over sight on the algorithms and filtering, they wield significant power to shape global conversations. Shaping global conversations fundamentally can lead to over throwing of leaders with out ever a bullet being shot, it could lead to genocide, nationalism etc etc.
It’s no surprise that the EU is on high alert.
Edit: I think this requires more exploring. This is fundamentally a war against a new form of influence & control of masses of people.
See previous wars: religion vs state, state vs monarchy etc etc.
Has anyone considered this perspective before? Would appreciate any links
This is factually wrong. Facebook controls a very small portion of Libra (<1/10): https://libra.org/en-US/partners/
But you're right that the token is backed by something, mainly one to one reserves of currencies and government bonds. So you're okay with bitcoin, that has a market cap of over $100bn that's backed by nothing, but someone creates a cryptocurrency that's backed by one to one reserves of the safest investments in the world and that's somehow extremely questionable.
If, for example, Goldman Sachs did the same thing, that might not go over smoothly, but I don't think it would see such a negative reaction. I'd assume that feels more in line with the status-quo, whereas tech companies getting involved in financial instruments is not as familiar.
I more so wonder what would happen if a company like Stripe did this. They are sort of a "financial" company, but I'd say also undoubtedly a "tech" company too.
All the media coverage on Libra is incredibly dishonest and ill-informed.
Distrusting them is the only logical conclusion given their track record and power.
Libra isn't a decentralized crypto currency, it's a new fiat currency minted by a private corporation with a very questionable track record and an uncomfortable amount of concentrated power. It's also seated in a country with a very weak track record enforcing rules on giant corporation misbehaving.
Users choosing to use something they collectively create and control is very different than this type of centralized power moves. They are in essence trying to bring billions (trillions?) of dollars worth of the worlds savings into US jurisdiction (and likely invested in the US economy via bonds and stocks)
Good decision on the part of Germany and France IMO. I hope more countries follow their example and protect their sovereignty.
That's not true:
> What are the actual assets that will be backing each Libra coin? The actual assets will be a collection of low-volatility assets, including bank deposits and government securities in currencies from stable and reputable central banks.[0]
[0] https://libra.org/en-US/about-currency-reserve/#the_reserve
> bank deposits and government securities
Your point doesn't contradict mine. It actually re-enforces it.
What percentage will be in US deposits and government securities? US bank deposits get invested into the market, so yes, this would take the money from someone in France, who would currently hold savings in a French bank involved in the local economy and move it to Facebook's vault.
The very link you provided lacks transparency and is exactly the type of reason I distrust Facebook. In fact it doesn't have a single #, percentage or actual thing I could verify/which they are committing to, the language is vague... I'm guessing intentionally so.
It's very different when there's a company with its own financial interests manning the door, regardless of what company that is.
A ban make most things commercially unviable. If botcoin had widespread use a ban would make it an underground payment system.
Digital services ppl ban child porn and gambling.
Sucks you are downvoted because you are right
How many cypto providers have > 2 billion users? FB should be regulated.
* - Intentional typo, for a double entendre.
Europe as a market has higher taxes, more regulation, and has more cultural barriers giving us a huge disadvantage when trying to compete in the global market with the big US (or increasingly Chinese) tech companies.
Unfortunately I think we may need protectionist policies like this if we want to develop our own tech companies and products. It's the same situation the US is in with manufacturing. The US simply can't compete with countries like China, so if the US is passionate about preserving its manufacturing sector the only answer is protectionism.
This amounts to "our country is bad at [thing], so let's restrict trade for [thing] to protect our industries."
Of course it sounds great until other countries counter by restricting the thing you are good at, and then everyone loses.
I'm not sure whose fault that is: https://www.theguardian.com/technology/2017/dec/05/ireland-r...
I don't think it's an "anti-US-big-tech attitude" so much as an aversion to companies that have repeatedly been found to break the law (be it tax, competition, privacy or otherwise).
You don't (at least I don't) really see much hostility towards Apple, Netflix or Microsoft, despite them being large US tech companies.
The only examples I can come up with for companies Europeans might be hostile towards are companies that have given Europeans reason to be hostile: Facebook (tax, privacy), Google (tax, privacy, competition), Amazon (workers' rights) or Uber (workers' rights, flagrant disregard of the law).
If European companies behaved the same way, they'd face the same consequences (feel free to give counter-examples). I think the reason you hear about American companies so much more often is because:
- They're big, so violations are big and fines are big, making them big targets and big news
- They often break the law (perhaps because they're used to operating in America, which is relatively lawless when it comes to competition and privacy), making them easy targets
- You're reading English-speaking media, so you're less likely to hear about say a mid-sized German or French company being fined
In the case of Libra, a validator needs to be brought into the Libra foundation, subject to approval of current members and a membership fee of 10 million USD.
So you can see Bitcoin (permissionless PoW) and Ethereum 2.0 (permissionless PoS) as anonymous, permissionless cooperatives where everyone is playing on the same field, whereas Libra consists of a small consortium of large corporates who can set the rules as they wish.
Just because Bitcoin is decentralized doesn't mean that a country can't ban it within its own borders. To do that, all a country would need to do is pass a law making it a crime to own or use Bitcoin, while also prosecuting people who didn't report profits from illicit Bitcoin transactions with tax evasion. At that point, no legitimate business in the country would be able to accept Bitcoin or convert it to cash, and the vast majority of citizens wouldn't risk fines or imprisonment to use it.
Since, at this time, a very small fraction of the population uses crytocurrencies (or even knows what they are), enacting such a law probably wouldn't face a lot of resistance, especially if it were presented as a measure to fight crime or terrorism.
Let's just use Bitcoin vs. Libra, because bitcoin is much easier to type than cryptocurrency.
You know, instead of typing up a list of the pros and cons of allowing your citizens to use bitcoin vs. libra, I'll just talk about the underlying premise.
I think that as a government, you don't want to lose control of the money supply. That includes:
* How the money is used * Inflation * (And unfortunately, nowadays) tracking the money.
Looking at this from the point of view of a government, it seems pretty dangerous to put all those controls in the hands of a company.
Personally, I would be against this decision for any company, not matter how well liked.
Situations change, and then the powerful can change the rules.
The key is to diversify where you buy and how you buy it so you're not dependent on any one company.
Oh and for completeness' sake: if paypal (and libra for that matter) are not regulated according to all the rules that other financial services have to obey, something needs to change. But then I don't know enough about the specifics of that to say if that is a hypothetical or not.
AFAIK US is a monopoly for international money transfer. You just cannot bypass a US intermediary bank and US Dollar conversion.
Just think about it - how would that even work?
..The transaction was automatically routed through the US, possibly because of the USD currency used in the transaction, which is how the United States was able to seize the funds.." [0]
Also: "The U.S. Office of Foreign Asset Control (OFAC) enforces U.S. economic sanctions programs ... and any person or entity physically located in the United States (including branches of foreign corporations)" [2]. And most foreign banks do have US branches. And if transaction is in US Dollars, OFAC applies too [1]. I can dig deeper, down the rabbit hole :)
All right. Seems like if a transaction involves USD, it must pass US based correspondent bank.
[0] https://en.wikipedia.org/wiki/Society_for_Worldwide_Interban...
[1] https://nacm.org/pdfs/webinars/FCIBWebinar_Compliance_OFAC_U...
[2] https://www.riskscreen.com/kyc360/of-counsel/ofac-compliance...
Most countries have central banks that settle and controls its own currency. Bigger banks have accounts at the central banks and can settle cross border without a problem. The US has nothing to with it unless you are buying/selling USD (which, by the way, you can do outside of the US banking system, if you like) or you are buying selling some obscure currency which needs to be exchanged via the USD (or any other liquid currency for that matter).
Many of my non-mediated transactions go through American institutions (e.g. Mastercard, Visa) but not all.
And if anything does go via USD I don't notice it, even in price; it's clearly cheaper to go AUD->IDR than to go AUD->USD->IDR.
Thanks, as I thought, most international money transfers involve USD and, because of USD, have to use US based intermediaries.
Governments are not angels which seems to be an assumption in your and sibling replies. They're a bully who doesn't want someone else to get power.
I'm not being extreme, humor me. If the govt didn't want a monopoly, isn't it a hypocrisy that they themselves are one?
The proper thing to would've been to get closer to anarcho-capitalism, ie let there be govt currency and FB's libra. Let people decide what they want to use.
I would be very very wary of a social media giant issuing crypto. Lots of inherit dangers there.
Libra = inventing a new fiat currency and then replacing a significant portion of other fiat currencies around the world through a cloak of "we're just here doing the next big thing, also App, p2p payments, online crypto AI blockchain social network Facebook innocent whistling of a song". As a little bonus, they would be selling the Libra nodes (that handle all the payment traffic) to third parties. Initially for 10 million USD per node. That way they can shift the blame of selling payment data to third parties away from Facebook, while still making money by giving third parties the right to do whatever they want with that payment data.
Having a banking license doesn't allow you to replace a countries' fiat currency by some new invented token. The value of Libra in Europe would depend on a promise by an American tech company (led by 1 man). A promise to keep the value of the Libra tied to a predetermined basket of fiat currencies. Assuming that Libra would become popular, this would yield pretty much infinite international political and economical power to Mark Zuckerberg based on the mere perception of the possibility that this promise could be broken by him. This is also why Libra is not comparable to an actual crypto currency like Bitcoin. The value and existence of Bitcoin and the Bitcoin network is not dependent on 1 man and the contracts he has with Bitcoin nodes.
Germany and France aren't stupid. I guess.
Those are my thoughts on what's actually going on.
it's such a small distinction I can see how you choose to overlook it ...
They can.
In Euros.
Thanks.
p.s.: they are already applying for it, PSD2 regulation allows them to emit cards or be intermediaries for payments.
No foreign fake, unregulated, privately conrolled currencies here in Europe, thank you.
there's not a snowflake's chance in hell that a megacorporation like Facebook is going to provide strong customer protections on a long-term basis, compared to what a EU country can provide its citizens.
how can you even begin to trust something that big, that has been around for such a short time (~2 decades?).
remember 15 years ago when people thought Google was cool and "one of us / the good guys" and way more trustworthy than most things on the Internet?
it's a long time on the Internet, but it's a blip in history when it comes to trust in state regulations and consumer protection.
The idea of a privately controlled currency needs to die quickly. Never been a fan of crypto currency in general but Bitcoin, and the like, are accepted because they are not centralized. Your Bitcoin won't change in value or disappear because your country and another get in a fight.
> Your Bitcoin won't change in value or disappear because your country and another get in a fight
If one of them decides that banning bitcoin would serve their interests - it will get banned. You, of course, could work around it - as people do for centuries with drugs, guns and ideas proscribed by governments - but then you'd have to suffer the consequences when you're caught. Yes, when, because if you live in government's jurisdiction and they have interest in getting to you, they will.
Yes but these other currencies don’t have the possibility to be the most used and powerful currency for everything you do, and who knows what shape, direction and impact Libra will take/have over time once that Pandora’s box is opened!
Why not? There's possibility that everybody would start flying around so much that United airlines miles would be so valuable that people would volunteer to be beaten up just to get a chance for getting some. This is a very remote possibility, but nothing in the laws of nature or laws of men preclude it, so it's a possibility. Facebook currency, which doesn't even exist, has roughly the same chance to match this description as United miles. But somehow United miles is fine but Facebook currency is Pandora's box. Note that Bitcoin is not pandora's box, Ethereum is not, Monero is not, 9000 cryptos that nobody can even count, let alone track, is not, but most white collar, buttoned down, corporate vanilla safe cryptocurrency that have ever been proposed, the most soft target, which would be the easiest thing in the world to track and regulate ever in crypto history - that one is the Pandora box! How does it even make a little bit of sense to you?
Not much difference except it is controlled by one of the most powerful, and richest companies on the planet, with the most data on everyone, ever compiled. That if you are a member, knows you likes, dislikes, politics, sexual preferences, entire social network, where you live, when you get home, where you go, whether or not your like your friends. That has a bigger market cap than the annual GDP of small countries, that competes in local marketplaces, could easily take on and possibly wipe out craigslist, ebay, and more, and could conceivably beat entire national currencies in capitalization, reserves, convenience, and ease of use, thus supplanting the currency of entire small nations.
Yeah, pretty much the same thing as airline miles.
If I could transfer them to other player, become a certified shop that accept payment with them, or do any of the many other thing you can do with money that would be probably a legally grey area.
(moreover I am not sure how you would tax such a currency)
That'd be a big surprise for me when I'll try to book my next flight with miles. I certainly thought they'd replace money.
> In Pokemon Go there are coins and they are nothing but points to spend in store.
That's literally definition of money - abstract points that you can spend in the store. Well, the definition of fiat money, to be precise, but we're not going back to gold doubloons anytime soon.
> that would be probably a legally grey area.
Transferring money to other person can certainly land you in legal gray area if it against the laws (money laundering, tax avoidance, fraud, etc.) So what's new here?
> (moreover I am not sure how you would tax such a currency)
The same way you tax any other goods. If you receive income, you are taxed on its value. You think if non-USD payments weren't taxed, nobody would have a bright idea to be paid is silver bullion? IRS is not stupid, you owe taxes on any income, and better believe it, if they don't know the exact value proving it to them will very soon become your problem, not theirs.
>That's literally definition of money - abstract points that you can spend in the store.
Better move all my savings to pokécoins then, I am sure they can then be used for money replacement.
Jokes aside there are innumerable difference between real money and an in-game credit both from practical and legal viewpoint.
> That'd be a big surprise for me when I'll try to book my next flight with miles. I certainly thought they'd replace money.
Again credit with a company of a consortium is incomparable to money with a legal standing.
What libra tries to do here is to create a new worldwide concurrency that can in principle subsume most national currencies in the world (maybe except the dollar for technical reasons).
You win cookware sets.
The best you can do to convert them in money is to trade them, but to obtain them you still have to buy them or flight for real (proof of work IRL)
But there's no largest marketplace on earth, controlled by a single company, where you can spend them.
I mean there is the tiny difference that one of these is the biggest social network megacorporation on the planet with the power and will to heavily influence a user base larger than France and Germany combined, but otherwise, yeah.
Nobody wants Facebook to have that power, even if they hadn't screwed over their users multiple times and seem to be devoid of scruples, they haven't even existed long enough to demonstrate deserving that kind of trust.
A currency used worldwide, controlled by a corporation, and under the influence of the US government would be the exact opposite, and is not a thing I want to see succeed.
Precisely what Satoshi Nakamoto cited as his motivations when introducing bitcoin on the p2pfoundation forums.
>A currency used worldwide, controlled by a corporation, and under the influence of the US government would be the exact opposite, and is not a thing I want to see succeed.
Completely agreed. The U.S. has been using any reach it has into other countries to push its very peculiar cultural viewpoints into countries that don't want them but need fair access to finance capital.
AKA only the really powerful entities can
AKA "dictatorship"
* Alter the monetary policy significantly
* Prevent a specific person, organization, or country from using the currency
* Prevent the use of the currency for specific goods or services
That doesn't make using Bitcoin a magic bullet to be free from the influence of the US government even if its popularity and monetary policy were appropriate for widespread use as a currency, but it raises the difficulty level versus influencing someone who's doing business in USD.
If you want a currency to be spent, it can't increase in value. That's the kind of thing you hold onto -- a store of value.
Also, i think it shows a major difference in the way of doing bussiness and between the economic models most used in european countries vs the USA. Most notably the idea of a much more cooperative economy vs the highly competitive american model.
things like the rhineland model[1] are common across most western european countries for a reason, especially outside of the anglo-american sphere.
1: https://en.wikipedia.org/wiki/Social_market_economy#Rhine_ca...
You mean, besides about 100 or so banks and trans-national corporations, including Facebook itself, that already exist? But yes, surely banning one more cryptocurrency out of over 9000 already existing makes huge difference. Not.
> Given the power cooperations already yield this is a _good thing_ in my view.
You view seems to be "corporations have too much power, so any action that hurts any corporation, even if it doesn't change anything and does not improve situation in any way, is good". This is not a very sane approach to anything.
Comparing it to the toy money that existing crypto currencies are is likewise entirely irrelevant. It's structurally different for one, as Facebook et.al. would back Libras exchange rate. It's also backed by enormous economic power:
You mean like the EU?
More than having to worry about my kids getting shot at school by some other angry kid.
I understand why the governments do this, because they fear losing control.
https://www.kuechenstud.io/lagedernation/2019/07/26/ldn150-p...
Of particular concern is the scale to which this can be bootstrapped by having the tech giants involved.
That said, the governance of Libra is setup with distributism in mind. Facebook has set it up explicitly so they don't control the currency, a founding group of 100 corporations will control the reserve (one vote each) and they are explicit about accepting new qualifying members.
If it takes off, it will attract a lot more corporations/institutional investors leading to free market control.
However, I don't see the point why governments are afraid of it because the monetary policy mechanisms requires a fractional reserve banking system to enact its effects.
Libra is fully asset-backed and wouldn't have an impact on any monetary policy.
I think what most people don't understand is that monetary policy doesn't work by devaluing cash, it works by making debt cheaper leading to companies end individuals to take out more debt to invest and as a consequence push up aggregate demand.
What a bizarre statement. Providing for security is also inherent to sovereignty of nations, but private security firms flourish.
It's also odd in the context of Germany in particular where a private currency has been used for many years:
https://en.wikipedia.org/wiki/Chiemgauer
I suspect there's a lot more behind this statement than meets the eye:
Inflation, and the ability of the state to force it upon its citizenry by forbidding the use private money - has come to be viewed as inherent to the sovereignty of nations. The world's governments are now entering a new phase in which none can afford to hold the more valuable currency due to the damage caused to export business. Net importers like the US have been holdouts, but even it too will have to bow to reality.
This conflict means that, no matter how well intentioned, policy makers will be feel compelled to devalue their own currencies. It's a race to the bottom, but without a bottom. Alternatives, especially private alternatives readily available to citizens, will increasingly be viewed as the enemy.
The Libra proposal kept its value constant with respect to a basket of currencies.
(This is one of the things that confuses me about Libra's target market; if you believe the cryptocurrency marketing about privacy and permissionlessness and inflation-hedging, then Libra is terrible at those things. If you don't, and you're in Europe, you just use SEPA.)
Germany is in a unique position of being able to jawbone about devaluation and monetary policy while reaping the rewards of spendthrift member states.
Germany has, and has had, an immense interest in keeping their currency artificially devalued and they have achieved this by entering into a fixed exchange currency union with countries like Italy and Portugal and Spain.
The PIIGS currency is, relatively, overvalued in comparison to the German currency because they have the same value.
So a first glance at German policy which is in place to protect their fragile banking system which is overexposed to PIIGS debtors looks to be currency strengthening - and perhaps it would be if they had their own currency. However the broad impact of German policy (their policy to be in a monetary union with PIIGS) is tremendously weakening of their currency, relative to the other members of the Euro group.
They exist entirely at the behest of their respective nation states' laws and regulations, and are completely subordinate to all official law enforcement and military forces. It's a flawed analogy. This would be tantamount to a private military company asserting their right to conduct foreign wars in the name of a subset of citizens.
https://en.wikipedia.org/wiki/Academi (formerly known as Blackwater)?
So far we have private companies providing security/defensive services, but we have yet to see private companies providing mercenary/offensive services without the explicit involvement of a government.
The British empire was explicitly on board with the East India Company, and passed laws clarifying what they were allowed to do.
France: Wagram Protection, Secopex, and many others.
PMCs are everywhere.
It's true that on the fringes there are private intelligence companies but the way the US has used PMC's, which at some point outnumbered american soldiers in the middle east, is a privatization of war not really thinkable in europe.
What are the advantages of libra compared to a normal bank transfer inside the bank union? Almost all positive aspects of libra already exists in the eurozone thanks to SEPA.
From an american perspective libra seems like an improvement, but the US is decades behind compared to the rest of the world when it comes to banking.
Libra is still a problem. They start with a basket of USD + Yen + EURs to start. This appeases governments, just for the reason you mention "based on their currences".
...but Libra is designs that they can move away from them over time. It can move to revenue generating investments, like corporate bonds (like money markets do).
Libra can then wait until closer to countries defaulting on their national debt. The countries then start money printing at far higher rates. Their currencies drop in value (aka far higher inflation rates). Libra then shifts to corporate bonds and revenue generating assets.
This is good for citizens. It moves Libra from unsound money (USD + Yen + EURs) to sound money (asset backed & revenue generating assets). That makes Libra more powerful than bitcoin.
This becomes a strategic problem because it can cause a RUN on the national fiat currency, as Libra flees it. Libra then is infitely better than national's fiat currency, because Libra is asset backed. The US Dollar has about $0.03 worth of gold backing per $1.00 (after all of the money printing).
But it is designed so they can switch those out for Gov bonds, corporate bonds, real estate (REITs), etc.
Libra is an idea AND a political entity, which feels like some mixture of status quo and new world which makes me uncomfortable.
That‘s a single, mostly dead non-profit project in a tiny area, not accepted by most stores even in that area and 99% of Germans have never heard of it. Hardly comparable to Libra.
But in Europe, we have more trust in our own governement and less in corporation than in the US, where it seem to be the opposite
I've seen that said many times in fora (fortunately not so often on HN), but the only people that seem to subscribe to it are the preppers and the gun fanatics, usually using some kind of reference to words that have not been updated in a couple of centuries. It's about as useful as wanting to back to the glory days of England.
Americans trust their government on average just about as much as people of other countries trust theirs, with a notable exception made for the Swiss.
> The distinction is this: No one is forcing anyone to use Libra its your choice. : )
And it is the choice of the democratically chosen governments of France and Germany to decide to so something about it, and I'm fully in agreement with that.
The last we need is for the Zuckerbergs to have the power to start dictating monetary policy, the amount of power he has today is already way more than he should have.
Note that neither Germany nor France has decided to 'block bitcoin', or outlaw it (which they could do, but it remains to be seen how much effect that would have). And we are not forced to use that either.
Maybe, excepted that Facebook is not an individual. Compagnies are not individual.
They are just private entities seeking for their own profit and should be treated as such.
There is no trust to have in Facebook: if they can fuck half of the world to double their benefits, they will do it. That's it.
Trusting such entity to ensure "common good of people" through a currency is simply madness. And Libra is exactly that.
I'm sorry if it shock the American "free" way of thinking, but this is our European way of thinking.
Corporations are exercises or government power, in fact.
Don't be naive.
- In order to make a choice, you need to be properly informed. Now, most people won't have the time or interest to see what Libra is and what the consequences of widespread Libra adoption would be.
- Facebook can force a sector of their paying users (mainly advertisers) to use Libra.
- Facebook also has a lot of influence, most people use at least one of Facebook, Instagram or Whatsapp. Those apps can be used to advertise and push Libra.
- Once Libra adoption reaches a critical point, you'd need to use it because you need to buy things.
- You don't need to use it to suffer negative consequences due to a private foreign for-profit business controlling monetary policy.
And the track record of public, non-profit entities controlling monetary policy is ... great?
Furthermore, Libra would have incentive to move the policy towards further profit for the members, while central banks have incentives to stabilize the economy.
But in that light, what France and Germany are doing makes sense too. At the end of the day, they too have the right to protect their collective interests, correct?
Or would you have them do something that goes against their interests so you would be able to protect your assets?
On the second part of your comment: I suspect some tech companies were given a while lot of leeway in many aspects by society at large, because it was generally believed that they would act in a more responsible way. Now, we come to the realization that maybe some of that leeway was misplaced.
There's another HN article in the frontpage today that basically floats the idea that Big Tech is a menace to Democracy itself. I think that's partly the explanation why people (and nations in general) are so suspicious of Libra.
I'm aware that I'm very biased here but the tragedy that is Facebook upsets me all the more for what it could've been. Instead of being a boon to society, they've become the worst form of surveillance capitalism.
I wouldn't trust facebook with handling my garden, let alone a monetary system. They have proven time and time again that they are reckless if not outright malicious and outdo even some incumbent bad guys in the sheer underhanded disregard for anything but their own bottom line.
Private security firms are also not ideal.
We've seen plenty of examples where politically controlled security forces have done terrible things to significant portions of the citizenry they are presumably there to "protect & serve."
Trust is the central component of the monetary system, you must trust the notes and systems used to exchange money. Creating a framework that brings this trust has been a central component since the invention of money[0], thru issuing that money and having the king or whatever passed as authority sign the coins. This is why issuing forged money has also always been such as an important crime - because that was forging the signature of the king/queen/emperor/minister of treasury.
So it's not that surprising to see that guaranteeing that trust and trying to prevent the issuance of alternative currencies is a role that governments attributed themselves in that framework.
One question is whether it actually is their role to say "you should not trust anyone else's signature" - aka your enemy reference
The more important one to me is, accepting this is now a thing, whether they should instead regulate what issuing organizations need to provide as guarantees under that signature.
I personally think so, because I don't trust FB one bit, and I'd love them to be bound to a set of rules
[0] Sapiens- https://www.goodreads.com/book/show/23692271-sapiens?
It has written something like "club internal voucher" on it!
Perfectly correct statement.
Also, what the hell is that supposed to mean? If something is inherent to something else, it doesn't mean it's exclusive to it. Maybe something got lost in translation, but if not - they don't even know how to say whatever it is that they want to say.
No, and that's the great point everyone is missing. Paraphrasing their logic: "it is inherent to the sovereignty of nations that no private entity can claim monetary power". In other words, they don't want private entities to control monetary power, but they tolerate this power being in the hands of "public" entities, such as the peer-to-peer/decentralized nature of many cryptocurrencies like Bitcoin.
This we-will-block-Libra attitude combined with we-will-torelate-Bitcoin-and-others is a big sign of approval for these cryptocurrencies.
Bitcoin has no Facebook-sized entity the French and German governments can control/admonish.
Neither did any entity related to Bitcoin go out and stake any ground like Facebook did.
That is exactly the point. That would be a threat as they see it (just from reading the statement even). That's why bitcoin which is not a private entity, is not seen as a threat at this time.
Bitcoin is tolerated because it's not centralized, and no one (obvious) entity is controlling it. If the EU governments could, they totally would ban Bitcoin.
Libra, on the other hand, is a power grab by someone they can regulate, so they will.
And again, if they didn't tolerate it, they could ban/outlaw it, just like China did.
I doubt the use of the words "private entity" was specifically intended to exclude decentralized currencies. It probably actually means "anyone who is not us."
In everyday English, it would be obvious, but regulators and politicians are not bound by that.
"It's obvious" is rarely a good argument on this particular site. If it were obvious we wouldn't be talking about it.
I don't think it's being used in a legal sense in the statement quotes in this article. If it is, I'm not sure how "private entity" is defined in the EU, France, and Germany.
"Private entity" actually is clear in common English, but my experience is that governments tend to take words from common English and use them differently.
If you have specific legal experience with this term in a particular legal jurisdiction---and you very well might---it would be helpful to say so.
They are not saying governments should have control of this power. They are just saying no private entities should have control.
From the article:
> In a joint statement, the two governments affirmed that “no private entity can claim monetary power, which is inherent to the sovereignty of nations”
I parse that as: monetary power is inherent to the sovereignty of nations; thus, no private entity can claim it.
It's like saying: "No dog should be allowed to eat chocolate, which is toxic to animals."
It would be helpful to have the actual original statement, but I wasn't able to find it very quickly and gave up.
> none can afford to hold the more valuable currency due to the damage caused to export business.
So it is said, but there are more effective ways to prop up an export business. Eg, direct subsidies for strategically important sectors. Lowering currency value does help exporters, but it helps them by basically giving free goods and services to foreigners at the expense of someone else. The US lowering their currency doesn't result in a better deal for the US nation. It results in more goods and services leaving the country than is honestly justified for the amount of imports. Resources are misallocated away from US consumers to foreign consumers. Economically speaking, that is an own-goal.
The US debt-to-gdp is on a wartime footing [0]. Devaluing the currency favours debtors. A link between those two facts is more plausible than governments really believe giving goods & services away to foreigners is a path to prosperity. There is a broad economic philosophy that has taken root that debt funded consumption is to be encouraged and monetary policy is a key tool for that viewpoint.
[0] https://tradingeconomics.com/united-states/government-debt-t...
not in EU they don't
also firms like Securitas mostly provide security services to enterprises, and gouvernements sites, not to citizens.
bad comparison example
Security for a nation state is different to a security guard standing in a shop. Also I'm quite sure that nation states reserve the right to claim a monopoly on certain parts of the security industry. The monetary/security power is in being able to claim that monopoly, as your currency example shows, the nation state can allow certain behaviours, that doesn't mean it has to allow everything.
"Inflation, and the ability of the state to force it upon its citizenry by forbidding the use private money - has come to be viewed as inherent to the sovereignty of nations"
So it isn't a bizarre statment then since you're pretty much agreeing with it. Maybe you only think it's bizarre because you don't like that nations accept that they have and want this power?
Try creating a private army and see. The state giveth and the state taketh
Not in France or Germany.
Just because US privataises it's military doesn't mean that this is universally accepted as a good idea.
Pardon me for not taking the corporate rebranding shenanigans too seriously.
[1] https://en.wikipedia.org/wiki/Nisour_Square_massacre
[2] https://www.reuters.com/article/us-venezuela-politics-erikpr...
No, it's not: providing security is a goal, several powers inherent to sovereignty might be applied toward that goal (conscription power, warmaking power, the power to impose punishment, and various other incidents of the monopoly on legitimate violence; even the monetary power is applied to that end), but the goal is distinct from the inherent powers of sovereignty.
Inflation right now is very low in all developed economies
Facebook if it were a country would literally be bigger than China. Their political power is fast approaching that of a nation state, they can already impact elections, have shitloads of money, etc.
When they do anything that smells even remotely like moving towards sovereignty, yeah you bet countries are gonna take notice.
From a legal perspective, there are three things that create monetary power.
1. The money created by the monetary power can be used to settle tax liabilities. Currently no currency except Federal Reserve Notes can be used to settle U.S tax liabilities.
2. The money created by the monetary power is not subject to capital gains tax when it is transferred. Currently, everything that pretends to be money is actually considered property and thus subject to capital gains tax on every single transaction. The tax is measured in its value in money.
3. The monetary power has the power to destroy money's value. In United States v. Kahre, a guy in Nevada was paying people in gold coins that were issued by the U.S government and circulated in daily commerce in the 1900s as legal tender. He used the face value of the coins stamped on them to report and pay his income taxes. The IRS said to him that those coins aren't money any more, even though they were at some point. A 15 year criminal conviction resulted.
By virtue of the taxing authority of governments, only the government has a right to monetary power. In fact, without tax authorities, the monetary power wouldn't exist.
I'm sorry but you are drawing a false equivalence. Security may be inherent to sovereignty, but you would have to argue that a MONOPOLY on security is inherent to sovereignty, in order for your argument to apply to currency.
The statement you quoted is just typical gov/political PR, common rhetoric.
However, it's everything but a bizzare statement, fundamentally. Ask yourself: how does the USA treat the US Dollar, would they be willing to just let it wane or die, be "invaded" by a foreign and private currency, as if it were not "inherent to its sovereignty"? Would the Fed be OK to just vanish and let the BCE or some private Asian conglomerate run the monetary show from San Francisco to Berlin passing by tokyo in terms of monetary policy? You in fact support the opposite view, inflation has indeed become many a government's tool.
Come on. This comment was either disingenuous or wildly uneducated about macroeconomics and political theory, either way totally fails to account for/relate to the European political/philosophical framework. Your world view is absurdly narrow, hyper-centered on the peculiar American case: few countries have privatized their citizens' State hence sovereignty to such an unfettered extent.
This can only happen one of two ways:
a. US government declares that currency legal tender. They won't do it ever.
b. all of US citizens voluntarily agree to accept this currency instead of dollars, only using dollars when they must (e.g. when paying taxes) but otherwise avoiding it like plague. This has been a common occurrence in places with unstable national currency - e.g. exUSSR countries in 90s-2000s, and many others. At that point, the US dollar would be effectively dead anyway as currency, and the only way to recover it would be stabilize it back and make it preferable means of trade.
The only way for other currency to push out US dollar is for US citizens and the whole world to become convinced this currency is better for them - safer, more stable, more convenient, more trustworthy - than the US dollar. If anybody can ever do that, it's not Facebook. So there's nothing to worry about.
> wildly uneducated about macroeconomics and political theory
What exactly in macroeconomics or political theory suggests that any private coin - of which literally thousands already exist - pose any threat whatsoever to the existence of national currencies?
They, of course, pose tax-avoidance, money-laundering, etc. risk - and if particular state's central bank goes completely bonkers and ruins their own currency with their monetary policies - as it happened in Zimbabwe, Venezuela and many countries before that - then the national currency can vane and die. But that happened many times before Facebook even existed and will undoubtedly happen again. Libra has zero to do with it, and nothing you just described comes even close to explaining bizarre and non-sensical action of European government. It's mostly looking as "this new thing is confusing to me so I ban it just in case". Funny thing it's not even new, it's just pure ignorance.
It isn't. Only the Bundesbank / ECB is allowed to provide a currency in for Germany.
https://de.wikipedia.org/wiki/Währungsmonopol
The Chiemgauer is a regional voucher system - more comparable to regional loyalty programs or frequent-flyer programs.
Official stance IIRC is: illegal, but so small and irrelevant by volume that it's best to ignore it and let people have a little fun and community engagement.
The ability to devalue their currency is an essential tool that central banks wield to battle financial crises.
Keynes pointed out that workers don't want to take a pay cut (and employers don't want to offer a pay cut, because they fear causing resentment), so nominal wages are "sticky." When they need to fall to reach price equilibrium, the economy tends to experience mass unemployment instead. It would be very difficult to convince all workers universally to accept a pay cut. The alternative is to devalue the currency so everyone is affected through the currency rather than by trying to propagate policy changes throughout the private sector.
Also, countries can have huge problems when they take on debts in a hard currency which they can't devalue. This is how you get runaway hyperinflation. Their revenues are in the local currency, but their debts are in (usually) USD. If they run low on foreign currency reserves, they can be forced to sell huge amounts of the local currency on the forex market in order to acquire sufficient USD to pay their debts. I can see why France and Germany wouldn't be eager to see yet another USD rise to prominence and leave them disadvantaged in debt financing.
Another talking point which comes up all of the time is the tension introduced when different regions (like Germany and Greece) are forced to use the same currency, even though normally economic forces would cause the weaker region's currency to move against the stronger one's. Devaluation would be fantastic for Greece but it's hobbled by crushingly expensive exports since it's in the Euro monetary union.
Also these bills literally say on the bill what currency they’re pegged to every time I’ve seen them. There aren’t enough in circulation for basic transactions otherwise.
This comment, talking about Germany, the one of the country that has had such a fear of inflation for almost a century, is highly ironic.
So yes, 84 years count as «almost a century»
So there's definitely still overhead that can make small transfers infeasible, but it's getting better.
It has gotten very prevalent.
tl;dr CNAPS is a bank-to-bank system, but in effect means domestic CNY transfers between major banks should settle within 30 minutes.
WeChat Pay / AliPay are a bit different, more like PayPal (though not completely like PayPal).
If Zelle cannot make the transaction happen, it is out of the running. Full stop.
I've noticed a "fee: zero" statement on the transfer page recently. I expect there will be an actual fee in the near future.
It may change now that businesses are allowed to pass on fees.
Venmo could be obsoleted just by the banks having a better UX, which I gather everywhere but America already has for sending money domestically
>As Sarah Jamie Lewis, the director of the Canadian nonprofit Open Privacy, put it: “Can’t wait for a cryptocurrency with the ethics of Uber, the censorship resistance of Paypal, and the centralization of Visa, all tied together under the proven privacy of Facebook.”
Either way, though, they're making fun of Libra. Visa is not decentralized and Uber is not ethical.
Governments feel threatened as the power to levy the inflation tax is being eroded with the rise of cryptocurrency, and I think the next couple of years are going to be very interesting as more businesses adopt crypto as a means of payment. And I wholeheartedly support this development, because much of the inequality that we've seen in recent years and general social turmoil is a direct consequence of irresponsible monetary policy.
A new gold standard with rent seekers won't save us from stagnant wage growth.
I don't even know why so many people are wasting their time on this stuff. Does the German/French gov not have other more pressing issues?
No need to fantasize about the risks of private mega-corp currencies taking on the monetarists even before it has made any realistic challenge to it.
Facebook and Zuckerberg deserves it though.
What happens when the unstoppable force of 21st century silicon valley tech-topia meets the immovable object of western financial regulations? We are finding out. Big, shouty, trying to do an end run round the regulators isn't a great opening gambit.
However, if national or sub-national governments can impose restrictions, it forces companies to go the extra mile to appease a larger number of affected people, disrupting their rollout until everyone is on the same page.
California often serves this purpose within the US, creating regulations that have national impact because it's too large of a sub-unit to ignore.
As it turns out, this "we know best" stance ticks off a lot of people, some of whom run states.
> Facebook and Zuckerberg deserves it though
Feels like those two feelings are at odds with each other. Either you feel like they deserve it, and not feeling sorry for them, or vice-versa.
I believe people working directly on Libra have good intentions but Zuckerberg's previous actions are just making it almost impossible to achieve Libra's objectives.
At Facebook's scale, there are so many good things it can do. It's just that its leadership ruined things for the company.
Facebook is not a digital currency company, they are a Social Media company. If they want to produce a digital currency, Libra should be its own company and not piggyback off the success of the social media product. Social media needs chat, so WhatsApp and Messenger makes sense. Instagram is another social media company. But currency? Too far outside the core competency.
Same with Amazon... selling physical products is their core competency. Selling digital products is an offshoot of that. Allowing others to use your sales platform goes hand in hand too. But how in the world did they get to be a tech company hosting other people’s websites? How do they have a video rental business and also host a competing video rental business? AWS doesn’t make sense for Amazon the retail company.
In the trust-busting era none of this would have been allowed.
After a company grows beyond its ability to maintain order within its own activities, it should always prune down toward its essential businesses and reform itself before the next stage of growth. Facebook is trying to do the opposite by extending to currency instead of resolving its existing problems.
I don't feel sorry for Zuckerberg.
Why?
[0] https://techcrunch.com/2013/09/12/goodbye-facebook-credit/
- Facebook is at best tolerated by the European countries, they 100% didn't trust it. It is one step away to be claimed as public enemy.
Basically Libra is treated as erosion to EU's governance, and transfer that power to US government. Why would EU welcome this at all?
They mean, "When the establishment rigs the economy by diluting the national currency, then the establishment must not let their citizens escape the damage".
People talk about a "rigged economy". Where I found in economics it really happens is 3% inflation that comes from constantly printing money. Low income and the middle class often don't get 3%+ yearly pay increases. When they accept a job, the economy is rigged against them by 3% inflation based loss in their pay level, every year (over and over). When people stay at jobs 10 years, 3% year-over-year devistates people.
1801 to 1899 had ~0% inflation when it was on the gold standard with sound money. 3% yearly inflation came after moving off of the gold standard and with printing money.
Printing money hurts workers.
Actually if you look at the history of the gold standard in the United States, and the bimetal gold/silver standard, you'll see that the gold standard is far from a simple solution and it had a lot of problems.
One of the biggest problems: how should the government decide how much gold/silver/whatever a dollar should be worth, and when should that decision be re-evaluated?
Similarly you can look at the economic damage caused by Britain bringing back the gold standard in the 1920s, and also how absurd the Bretton Woods system became over the years as the exchange rates pegged to gold started diverging more and more from economic reality. The gold standard has tons of problems.
I can only hope other countries will follow soon.
[1] https://blog.coinfabrik.com/libra-association-a-menace-and-a...
> Libra will not rely on cryptocurrency mining. Only members of the Libra Association will be able to process transactions via the permissioned blockchain.
(From Wikipedia)
It's just a payment processor. I don't know why it's called cryptocurrency. If the bar for that is "it uses cryptography" then Paypal is a cryptocurrency because they use HTTPS.
It’s hard to take crypto enthusiasts seriously because of delusions like this.
Banning bitcoin would be trivial: no legitimate business would accept it, making it useless except to fringe outlaws.
> Libra will not rely on cryptocurrency mining.[20] Only members of the Libra Association will be able to process transactions via the permissioned blockchain.
It's not a cryptocurrency at all. It's a cryptocurrency to the same extent that, because your credit card cryptographically signs the transaction at the POS terminal, euros can be said to be a cryptocurrency.
Somehow they get away with calling it cryptocurrency when it's really just another Visa or Paypal. Nobody should want to use this and that should be obvious, but 'crypto magic' is involved and so we need to have the conversation.
Most people think Bitcoin is working as a digital native currency. In reality, Bitcoin is not doing anything much. Bitcoin community is sticking with digital gold, Store of Value narrative. That makes Bitcoin uninteresting. Normal people cannot really use it.
There is a big gap between digital native crypto like Bitcoin and government issued currencies. The market needs to evolve to fill in the gap before we can use a currency like Libra.
I outline the problem I see in the below article. I think we need a digital native stablecoin to connect Bitcoin to the real world.
https://bitflate.org/post/2019/08/26/bitcoin-missing-link-to...
It is a new form of currency for a user to obtain and use within the Libra ecosystem. I would imagine that the ideal world for Libra is for a user to onboard into the ecosystem and transact solely in that ecosystem. It would obviously require Libra to be ubiquitous for this to happen, but it may be the ultimate goal.
In this case, an American user would transact solely in Libra and not US dollar. I am not an economist, but I would imagine this is similar to Americans selling US dollars for foreign currencies, which I imagine weakens the dollar if done at a large enough scale.
Additionally, Libra is incorporated in Switzerland. I can only guess that this was done with foresight that the US might fight back against this new currency that competes against the dollar. With this incorporation location, it would be harder for the US to shut down this new monetary system.
A "ban" doesn't need to be technological.
Sadly it is not uncommon to see people going to jail for stealing a few chicken because they were hungry, while many company owners and politicians hardly face any jail time for their proven corruption affairs.
Being popular and law seldom come hand in hand.
Stealing a chicken has a clearly defined victim and stealing, not even piracy or patent infringement is well understood and universally condemned action.
You pass a law. Most people don't break the law.
You make it illegal for banks to transfer to known Libra things. You audit people. You apply big fines.
Murder is illegal but that doesn't mean nobody can commit murder.
Libra is hardly morally questionable. If you want a better comparison take (software) piracy.
Piracy is illegal and while I'm sure Steam, Spotify, and Netflix has reduced it a lot it is still thriving and many people break the law if not daily at least monthly.
Best thing you can do is to make a law that forces banks to prevent payments to known Libra sellers, but again if there is value in Libra this hardly makes a difference.
For one unless there is official list of every entity that sells them and they get instantly blocked you could just buy them before they get blocked. Secondly you could just use PayPal to transfer the money (first to your PayPal wallet and then to the seller), EU is not crazy enough to block PayPal without an alternative in sight.
Secondly take any gray-market on the Internet. On these markets you can already use a range of payment methods starting with freaking Starbucks Gift Cards to just plain old cash.
Yes, yes, just like most laws it will keep the honest people honest and we can assume that at least in the start that will be most of the population, but such a law would be so trivial to bypass that if there is any benefit of having some Libra people will have it and outside of completely breaking privacy of EU citizens there is nothing they can do about it.
Besides the context (and the legal aspect), they are the same act, homicide with intent. Their morality seem to be different depending who you ask.
And as for Libra being made illegal, I don't see what value it provides in EU to make it worth breaking the law.
Death penalty is not moral. How you got this out of my message is beyond me.
Killing enemy soldiers to defend your life or land is justifiable. They are trying to destroy you. But I guess this is weird from American point of view (I'm just assuming since I don't think anywhere else has death penalty still in use and other countries haven't been involved in war in foreign countries for past two decades), but killing people who don't look like you in their own land because they are firing at you because you have invaded them is actually immoral in more ways than one.
With digital goods such restrictions aren't nearly as big of an issue. You can trade (semi-)anonymously with very little fear of getting caught. You can easily disguise your country of origin and even hold the money off shore, all of which would have required a lot of capital to setup with actual gold in the 1930s.
>Best thing you can do is to make a law that forces banks to prevent payments to known Libra sellers, but again if there is value in Libra this hardly makes a difference.
It does make a gigantic difference. They don't need to ban all of the Libra exchanges, just the big and knowledgeable ones, and go around banning anything that goes too big, so that people who want to retrieve EUR from Libra need to search a lot and comb through exchanges to see who's trustworthy. That makes using Libra a hassle, and if there's not a lot of adoption of Libra and it doesn't reach a critical mass, the currency becomes useless.
> if there is any benefit of having some Libra people will have it
That's a big if.
You skipped the part where I detail how underground markets already get past this. To reiterate here: banks can ban money transfers to the biggest exchange, but people can simply use PayPal, Bitcoin, Cash, or even gift cards to transfer the money.
Sure this will drop the most casual of users off, but again if there is value in Libra that hardly matters.
>That's a big if.
You need to realize that because someone is poking holes in what you believe doesn't mean they are completely against you. I have and probably will not advocate for anyone to use Libra. I have no Libra and I probably never will have any. I don't trade with any currency, I'm only interested in Bitcoin and other blockchain currencies as technology enthusiast.
I feel like people on the Internet often forget that the world isn't black and white. Just because I don't agree with one of your views doesn't mean I don't agree with the rest.
Maybe in Germany, most people will stay away from it but in Bulgaria, Spain, Italy etc. - in places where people are more "relaxed" about the law enforcement will not miss business opportunities just because their rich neighbours can afford to miss it.
If audits materialize they, the users will simply set-up or use proxies to deal with it. Someone in the USA will set-up an Libra-Bitcoin-Euro-USD exchange for example and the transactions will go through these. I can already see an Ukrainian-Russian-Bulgarian-Romanian-Turkish partnerships to run these operations. Europe is a mess, laws and enfrcement capacity is very different in every country and countries are in multiple clubs(in EU, in EEA, in customs union, in Eurozone, in schengen, not in EU but confirms to EU, not in Eurozone but the currency is pegged to Euro, in EU but not NATO, in NATO but not in the EU. It doesn't have an end) giving differnt rights and different obligations to people in each country and even messier when they are not in their own country or hold multiple citizenships.
Not true. It depends on the country, in the UK you can buy SIM cards from wending machines that work straight out of the package and it's not he only country that does not require ID for SIM cards.
Anyway, even if your identity is tied to your Facebook account, what stops you from creating an American or a Filipino Facebook account? Phone number? You can buy a phone number online. You can also buy a verified Facebook account too.
Let's say that Facebook somehow starts operating as strict as a governmental body and checks everything, what stops you from buying Libra from an American or a Mexican? I haven't checked the details but this Libra thing doesn sound like Steam game money but like cryptocurrency, so they probably cannot do whatever they want just like that.
The forming of a financial underworld in the Eurozone is pretty doubtful in my mind. Sure, enforcement varies country by country but if this would get a big enough problem we also have international efforts in the EU to get rid of it. Worst case somebody gets a data dump in lieu of Swiss tax evasion dumps on CDs a few years in and the laws against it get even stricter.
The theme here is that Facebook has lost the trust of too many important people, and maybe they just want to hurt what looks like another enormous American tech company that has been too careless and too aggressive.
They would just have conclusively proven that they ignore KYC regulations and are running the biggest money laundring operation ever
It's about time we all disabused ourselves of the libertarian utopian dream that just because cryptocurrency is on a distributed ledger than governments can't control it. "How do you stop people obtaining it and using it through their buddies on the internet" - quite simply, by telling them they'd go to jail, or get a hefty fine, for doing that.
Companies are even easier to control than people because their whole existence is made possible by laws and regulations of governments.
And this is how we know the "small government" slogan is an absolute sham.
That method does not work very well for e.g. weed.
Not quite, in the case of Libra. Only a handful of companies control the nodes. Which makes it relatively easy to enforce a ban.
Let's not forget that the euro is a stable currency compared to most other markets libra wants to compete in (the developing world). What is in it for me as a consumer? Atleast the Eurozone has rules in place to protect my savings (up to 10.000 euro[0]).
Libra brings nothing to the table in terms of transaction speed or costs either (for the consumer atleast).
1 https://www.ecb.europa.eu/explainers/tell-me-more/html/depos...
(No, I don't get it either)
France and Germany can entertain IP blocking these services and put laws in place for citizens to not use it. Interestingly though, this is exactly what a free country should not do I guess.
> Interestingly though, this is exactly what a free country should not do I guess.
I think a free country should be able to put restrictions in place to avoid foreign profit-driven corporations to interfere and manipulate their economy.
In the end, it doesn't really do much but slow things down for some users or add extra steps to the process of extracting value out of Libra as long as somewhere is willing to run a quasi-legal exchange. There is also the option to threaten Facebook/Libra with sanctions if accounts can be proven to have been made/facilitated for Citizens.
Another possibility is the requirement to maintain access to the blockchain for mining and analysis against other financial activity the respective governments have the capability to audit.
Hence is the danger of something like Libra combined with Nation State scale actors.
The common person on it may not see anything but addresses, but given enough out-of-band info, the potential for government use as surveillance (or any large organization really) is far too large.
Black markets can never be prevented.
The question is whether people would want the goods. Is there a black market for Zimbabwean dollars in the USA, for example?
Libra is pointless in Europe. In fact, it's pointless anywhere there is a developed financial and payment system.
The battleground is therefore places like Africa or South and South East Asia, and there's a reason China has quickly announced an alternative.
Libra is several things; most of which already exist in other forms in the EU. That makes it hard to block as a whole. At least not without also impacting a lot of other companies and people doing similar things because the law should apply equally to all.
First of all, it's a permissive blockchain similar to e.g. Ripple and Stellar, both of which are used by companies in the EU; some of which are fintech companies actively collaborating with the German, French and other governments. Some of the coins on these platforms are stable coins for euros, dollars and other coins. Some of them represent bonds (e.g. a German company called Bitbond) and some of them of them are new coins. Some EU companies even offer credit cards backed by crypto currencies (e.g. Wirex is based in the UK and offers it's products to people in Germany and elsewhere).
Then there is the notion that quite a lot of EU citizens own and actively trade in bitcoin, eth, and a wide variety of other coins already. Why would a Libra coin be any different just because Facebook is behind it? The scope of what they can ban here under existing laws seems unclear. Making new laws takes ages and has so far not really happened. Most blockchain companies operate under interpretations of the existing laws. My guess is that market making for Libra like Facebook is planning would probably be subject to regulation and also be problematic in many other countries (like the US).
Then there is Move, the language used for implementing smart contracts in Libra. That too already exists in the EU market in the form of loads of companies doing all sorts of things on top of mainly Ethereum and using Solidity, which is technically similar. You can argue about how useful these things are but there is a lot of investment happening in startups doing things with block chains and smart contract. A lot of that is happening with permission of the relevant authorities. E.g Bitbond was approved by the German Bafin.
So, singling out Facebook to do any of those things does not sound like it would be very practical from a legal point of view.
What they can do is take action if Facebook starts promoting and trading it's own currency within Facebook which I'm guessing would require a bank license or at least expose them to financial regulation.
My guess is that Facebook will instead launch Libra with a simple stable coin backed by euros and dollars and post pone launching their own coin. This would make it more similar to what e.g. Apple Pay and Android Pay enable: a simple online wallet that users may use for paying for things online. The fact that there's a blockchain involved is maybe technically interesting but not necessarily a problem. I'm guessing they'll also be exploring using smart contracts for a few things. Facebook as a payment provider would of course be subject to the same kind of rules that Apple, Google, and others have to deal with.
A further complication might be that Facebook is isolating Libra into a separate foundation. That might shield them legally and allow them to push some boundaries. One thing they might eventually do is launch Libra the coin only in certain markets. They were talking a lot about third world countries in the original announcement.
Other blockchains have not been blocked outright because they don't pose a threat and are developing slowly, so EU countries are working towards more or less sensible regulations. Facebook has far more power to drive adoption, so in order to avoid a situation where Facebook screws up (intentionally or unintentionally) they block the currency preemptively.
> quite a lot of EU citizens own and actively trade in bitcoin, eth, and a wide variety of other coins already
Relatively, not that many. Also, those currencies are being mostly used as investments, not currency.
> Why would a Libra coin be any different just because Facebook is behind it?
Precisely because Facebook is behind it: a foreign company, known to bypass and ignore regulations, with interests that do not necessarily align with those of the citizens, and with zero accountability.
> startups doing things with block chains and smart contract.
As long as it is not a global currency owned by private corporations it's ok.
> This would make it more similar to what e.g. Apple Pay and Android Pay enable
A different coin is very different from Apple and Android Pay. Payment systems are very different from coins.
France and Germany are being quite vague about what exactly they will block, what the scope is of that, or even how they imagine this would work. Also, Facebook itself has not been very clear about their actual intentions or those of the Libra legal entity that is supposedly governing all of this. Depending on how you read their announcements, Libra the coin might be considered as an experimental/optional part of an overall solution or vision that could also involve euro/dollar tokens (just like others trade on Stellar, Ripple, etc.).
Sovereign monetary policy goes out the window if Libra takes a serious hold in society. The only solution to that is a decisive ban on it.
When reading a lot of these arguments, a lot of them seem to me to be very “white box” defending the end result against legislation by arguing about the internal implementation.
Facebook is creating a financial instrument. I’m a bit surprised regulators couldn’t use _existing_ legislation to prevent them from using it in a country.
The financial instrument part of it is getting all the attention here even though it's hardly essential to Libra (the platform as a whole). That too is not new and they'd have to apply existing legislation in a way that is consistent with how they are already applying it.
That's the key point. Failing to do that would create a lot of problems; which automatically translates into court cases and judges deciding on what is the correct way to do this rather than politicians. That will take many years. Existing legislation is the only legislation that matters because creating new laws or emergency laws would be very hard; especially considering that nobody seems to agree on what should actually be in those laws.
So we're getting a vague "we don't like that sort of thing" in response to a deliberately vague press release a few months ago that wasn't being very specific on a lot of things. It's a political statement not actually backed up by concrete plans to change legislation or instruct authorities to interpret it in a certain way. It's a hollow threat.
Of course you have to see this in the context of the bigger picture of tax dodging and privacy violations associated with big US tech companies operating in Europe and the public pressure to do something about that. That's what this is. Political posturing.
not sure there is a principled reason why the power to govern the exchange of goods and services (which is what money facilitates) should be up to them.
Except in some theocraties where you're 2nd class citizen when you don't worship the official God (Israel, some Muslims countries...)
And in the US, the President oauth is on the Bible and "under God" if I remember clearly. So, in a way, it is still the case: how would a Jew or Muslim or Buddhist be able to do that?
Governements are elected to provide services for the good of the nations. That include security: physically (police, army) and economically... so the money is a way for a state to provide security for the trade
Federal public officials in the US can swear on anything they want to, the Bible is not a requirement.
That really needs a standardized currency.
assumption right there
If yes, I think it won't matter at all. EU already have real-time electronic payments and mostly everyone uses contactless cards or appley/android pay.
I think the benefit of Libra, as peer-to-peer money is valuable for countries in Africa or other parts of the world where cash is king and unsafe (due to high crime rate).
How is this going to make a difference? Either I steal your wallet or I steal your... wallet.
It is far from clear that Libra would be in conflict with existing laws. Probably new laws would need to be written to forbid it. Germany has not had any capital controls after WW2, so I don't take it for granted that such law would pass. On the other side Facebook's reputation in Germany might be even worse than in many other countries, so that could create political pressure, even if Libra is legally not the same as Facebook.
Personally as a consumer I see the biggest problem is customer support and accountability. Banks are not known for closing customers accounts and keeping the money. Internet giants are known for no customer support and (automatic?) deactivation of accounts for unspecified violations of terms of service. (Has happened to my Microsoft Drive where I stored 1 file, an encrypted backup. And HN readers have read about more cases)
Crypto currencies such as Ethereum and Bitcoin will ride on the coat tails of these currencies to be truly first class citizens of the banking world.
If some part of the monetary system is taken over by something that is not money, it is almost impossible to be able to control the amount of money in circulation or inflation or the need for new government money will be uncalculatable.
I can not comprehend any country allowing this unless it has got some extremely high tech mechanism to control the amount of money that goes into crypto/libra.
A government issued currency is based on the promise [1] given by a state that this money must be accepted by everybody else. Everyone can enforce his rights by law.
A distributed cryptocurrency is based on trust given mutually by the users. The trust relays on the circumstance that no significant number of participants will abandon their precious investment may it be acquired through mining or purchasing of coins.
The trust system only works between participants. Trust can't be enforced.
The promise works with a third party. When two parties to lose confidence/trust into each other they can relay on a thrid party (the gov.) to enforce a prommise between two participants.
I was at Best Buy the other day, and as I was browsing through the home automation shelves, my eyes were quickly attracted by an ugly logo, blue over white with an atrocious font -> "Facebook Portal".
While I did remember hearing about Facebook plans to just, build this home camera+microphone connected thing, never would I imagine a remote universe where this product would actually hit the shelves. In fact, I naively always thought there are these teams called product and marketing that among other things are supposed to analyse the market and predict consumer reactions. I might be entirely wrong of course but I never ever imagined a world where such a product could be sold to a customer while being branded Facebook at the same time.
I have exactly the same feelings about Libra. A currency controlled by a corporation is a "no thanks" to begin with, but in the case of Libra we are talking about the last corporation anyone with a sane mind would ever consider (a bit of exageration here but let's say, one of the worst). I seriously have a hard time understanding how those evidences are not determined internally before communicating such plans publicly. It is either trolling, or there is a serious problem of isolation and there might be a yes men plague in this company.
On the other hand, there are thousands real and virtual moneys that exist and can be exchanged for real and virtual goods - from game money to crypto tokens to vouchers to points and miles, and so on. There is literally thousands of entities that create means of exchange that later can be exchanged for goods, and commonly are - and nobody has ever had trouble with that, at least not in any free countries (in USSR, you'd got no miles for flights :). So what changed?
In the future, if governments (or private entities) can get around that, then the US doesn't really have any non-military leverage. The US government seems interested in Libra because if it grows and becomes the de facto crypto currency in the future, and they have a good amount of control over it, then they don't lose any power.
Then again, they might lose control over it while Facebook just hustles everyone for their data and money. France and Germany are probably interested in the international financial systems being stable, but are probably a lot less inclined than the US to bet on Libra because they don't control the US dollar right now anyways, and if anything goes sideways they can't really control FB either.
https://news.ycombinator.com/item?id=20252375
Currency and sovereignty are inseparable, have been for all of human civilization.
Libra is owned by a company and Bitcoin is a cryptocurrency.
But I guess we now not only lost the war on the definitions of 'hacker' (media word for cracker) and 'crypto' (media word for cryptocurrency), but also cryptocurrency (media word for digitally exchangeable currency, e.g. Paypal credits / gift cards / Facebook Libra). We'll have to find a new word to distinguish Facebook-issued digital credits (Libra) from a distributed payment network running on cryptography and rough consensus (Bitcoin).
In my opinion both completely reasonable reactions to Facebook attempting to set up a private currency.
Well said, that should be self-explainable enough.
The next time governments bail out another bank, they should just hand them a zillions Libras and ask the banks to collect the actual money from Facebook when they need it. Don't know if that is technically possible, but I would certainly support such a bailout scheme. :-)
Paypal and other "digital cash" solutions are fully centralized which makes it impossible for devs to build on top of their platform. This means that problems that arise cannot be solved by devs looking at the problem from the outside.
Libra gets around this by having an open platform that anyone can build on. Anyone can create a Libra wallet, and anyone can build Libra services. If we have a big privacy problem with Libra in the future, we might be able to find a way around it. Libra supports scripting on-chain which would make atomic swaps possible. If something like atomic swaps are possible, can we hide information from Facebook et al? Or what about mixing Libra on-chain?
When major government policy proposals are brought into the public discourse, we argue endlessly about the edge cases, downstream effects and hypothetical scenarios that may in turn cause future problems. Universal healthcare is too expensive, the green new deal won't work, bring the troops home, etc. People argue forever around the hypotheticals of these ideas.
But when one of the most powerful and consistently nefarious companies in the world starts to build a system to cut out the global banking system, we're fine to say that we "might be able to" find a way around major problems facing the platform if they gain too much control.
The inconsistency in the level of scrutiny that we levy at companies compared to governments is shocking given the influence that the public has over government policy and operations compared to a private, multi-billion-dollar company.
"might be able to" isn't good enough when it comes to building systems that undermine the current financial system. All aspects of the system need to be spelled out in concrete terms, and safeguards must be put into place to ensure proper implementation and alignment of incentives. This must be regulated, without question.
Yes, big banks are greedy and corrupt and aren't looking out for the little guys. But neither is Facebook, and if there's an institution out there that is less fit than the banks to control the global financial system, it's Facebook.
I can't find it anymore but I remember reading a story, either on or linked from HN (probably linked), where someone recalls a realization they had in their teen years. It went something like this:
Rules do not exist because people like making arbitrary rules for no reason. It is sometimes even okay to break rules, so long as people do not mind what you are doing. Only when you make people angry, new rules are made to stop you from doing that. You can abide by the rules or break them, but you only get in trouble if you make someone unhappy.
(The original was a lot more coherent/consistent, I'm just paraphrasing / mixing wordings that might have been in there.)
So in the legal sense, yeah, you are technically right. But if you make a country's rulers angry, they'll just decree a new law. (Which is why I never really understood trias politica, by the way: the elected rulers can just make a law for something when the court case didn't go the way they wanted, and the unelected lawyers can create case law with far-reaching changes. But that's another topic.)
People seem to be swallowing it, though.
The problem with big money and big idea people, is that at some point they want to build a new world, but if you ask them about the old world, they don't have a solution, and deep inside they would rather see the old world burn to the ground. They're not even obsessed with power, they just want to build new things like they built an app in 1 month, to see if it could work, because the idea is sound and that it might solve many problems.
Those guys always have big big ideas but the truth is that they have absolutely no clue how the actual real world have been working for centuries and what are the real cogs of human society. It's like history doesn't matter, and that silicon made everything completely obsolete.
If you understand this, in a way, you can definitely understand why China has a big firewall. And frankly it sounds like the internet has just turned into a big advertising, political propaganda machine that just turn people into consumerist monkeys. Of course it's serving american hegemony pretty well, especially if you look at how google is siphoning data all over the world. I'm glad that countries are realizing that internet is not the cool thing of the 90s anymore.
What's weird is that facebook is now a thing for old people, the young doesn't even use facebook. I stopped using facebook in 2010 so I would never have known anyway.
Frankly there are days I wish the internet would collapse. GDPR is already setting a big fight, the battle against US digital giants is far from being over and I hope it keeps going.
* easy cross-country payments
* non-government money institutions
'Cause money always been the major element of government power.
For typical people, I think, Libra and similar are more positive. If you can pay someone in Africa from Japan with minimal fees/headache, it's very cool.
Money is power, as you imply, and I don't want any of it in Zuckerberg's hands.
It looks like we not only lost the word 'crypto' (to cryptocurrency instead of cryptography), but we'll have to find a new word to distinguish Facebook-issued digital credits (Libra) from a distributed payment network running on cryptography and rough consensus (Bitcoin).
Personally, I think its an interesting project, with both interesting technical, monetary, and political problems that will be encountered. I'm looking forward to seeing how it turns out.
Investors > Intelligence.
Artificial Inflation.
AI.
It has caused people more pain than good
Maybe that wouldn’t be an issue if Europe was the best of friends with America, but as that’s obviously not the case. I don’t think our relationship will fully deteriorate, but we can’t ignore the fact that we may have to prepare for a Europe which is less reliant on American tech companies.
If Amazon, Apple, Google, and Facebook were broken up into collections of smaller, independent companies... a lot of the ills would simply disappear, and the market as a whole would be a lot healthier.
I suspect if they were a bunch of smaller companies, they would all just sell or trade the information with each other.
Apple - Probably the most debatable of the group. See first-party app store [2]. The biggest case for Apple would be about how lazy they've recently been for non-margin generating offerings. Since iTunes, and then the app store, they've gotten lazy about relentlessly innovating. You've seen it in the iPhone and the MBP. To say nothing of their server offerings.
Google - See data hoarder [1]. See first-party app store [2].
Facebook - See data hoarder [1]. See first-party app store [2].
Google and Facebook are essentially the Valves of everything. They're spitting out cool things here and there, while rolling in the mountain of cash they're taxing from the rest of the economy. You'd be hard pressed to convince me that cash wouldn't better be spent by other companies.
[1] Data hoarder. By centralizing collection of user / customer data (usually by first-mover advantage, leveraging that to buy any existential threats), these firms have created a dominant market position. They control the platforms, so they collect the data, so they have more data, so they can more efficiently monetize that data, so they can afford to buy competitors (repeat). This cycle is unlikely to be broken without regulatory intervention.
This is firstly a sub-optimal state of affairs because it allows these companies to rent seek from all downstream consumers of this data (most clearly: advertising). By leveraging their position as the sole source of an ongoing data feed for "their" users, they position themselves as the only place to obtain that data in a functional manner. Ergo, all downstream consumers are compelled to purchase it from them, or do without.
The counter-argument is that they perform this function more efficiently than a hypothetical freer market of numerous competitors. However, I leave it to you to decide how often an entity without external competitive pressure has chosen to operate in the most globally efficient manner for their customers.
Secondly, this impacts product development, whereby the data owners may choose at their sole discretion not to share this data with competitors. As a result, there are products that only these parties are capable of creating. Because of the scale of these organizations, there are many opportunities they will not see as worth their time. Consequently, those opportunities will never be pursued, as the smaller companies interested in doing so simply can't without access to that data.
One might argue that that's sub-optimal, and that eventually the data owners would awaken to the profit opportunity in selling that data to the interested companies. To which I would retort something along the lines of "GM, Ford, and Kodak all recognized new market opportunities, and did they pursue them?" Institutional conservatism and inertia at scale is a lazy thing.
[2] First-party app store. By owning the underlying hardware platform / presentation interface (in Facebook's case), there's a clear conflict of interest. First-party app store owners face a substantially lesser incentive to innovate, secure, or respond to customer demands than they would in a free marketplace. As a result, app store management practices and technical functionality rot in comparison to a free market in which they were forced to compete with competitor's app stores.
Without going in depth, there is an obvious financial component, whereby first-party app stores with a monopoly are able to rent seek and extract a greater-than-optimal cut of app revenue. In a free market of alternatives, greater portions of app revenue would flow through to developers (note: in individual, the aggregate case is admittedly more complex).
Additionally, this extends to app censorship and policies. By controlling app stores as the gateway to "their" customers, the underlying owners can shape the kinds of apps they allow to exist. This produces negative outcomes in at least two ways. (1) Apps' responsiveness to actual customer demand is suppressed, as they must first and foremost satisfy app store rules. This can be seen in censorship policies (e.g. issues with distributing open source or "PR sensitive" apps), as well as functional abilities (e.g. the variety of always-on / background execution use cases precluded for all but first-party apps). (2) The app market is distorted to optimize for revenue in the current system, as opposed to revenue from actual customer demand. If there were a freer app store market, I offer that you wouldn't see 1,000 clones of "flashlight w/ ads" apps.
The manipulation that goes on on facebook and similar platforms would be illegal in our news papers, and it's exactly because we have a history of mass manipulation damaging society that we have those laws.
They've just not caught up to the modern platforms yet.
Bullfighting for example is also a social activity, nobody pays to see a bull getting killed, but to connect to people; and there's enough good reasons to outright ban the practice.
Collecting data on the citizenry under the guise of a communication platform doesn't sound right in a free society either.
You obviously transition and acknowledge/consider the same in your second sentence.
Maybe if the companies primary goal was to provide a communication platform government regulation may be concern, but their primary goal is to collect and monetize user data, the premises upon which they get the users to contractually give them that data being secondary should give the government more latitude without any free speech concerns.
"..assuming informed consent from everyone involved/affected"?
Q: What about if a third party starts putting information about you on FB and you've not even been told in advance, never mind given consent?*
* this happened to me two weeks ago. I don't have a FB account.
The "harm" Facebook causes is subjective. Some people actually get a lot of pleasure out of it; not everybody is an introverted, neurotic techie.
"We found that teens who spent more time seeing their friends in person, exercising, playing sports, attending religious services, reading or even doing homework were happier. However, teens who spent more time on the internet, playing computer games, on social media, texting, using video chat or watching TV were less happy.
In other words, every activity that didn’t involve a screen was linked to more happiness, and every activity that involved a screen was linked to less happiness. The differences were considerable: Teens who spent more than five hours a day online were twice as likely to be unhappy as those who spent less than an hour a day." - https://www.vice.com/en_us/article/kzn9d3/cell-phones-linked...
Ironic; that's the same ethos being espoused and implemented by those who run Facebook.
Here are some findings from a NBC/WSJ poll [0]...
> 57 percent of Americans say they agree with the statement that social media sites like Facebook and Twitter do more to divide the country
> Fifty-five percent believe social media does more to spread lies and falsehoods, versus 31 percent who say it does more to spread news and information
> Sixty-one percent think social media does more to spread unfair attacks and rumors against public figures and corporations, compared with 32 percent who say it does more to hold those public figures and corporations accountable.
> 82 percent say social media sites do more to waste people’s time, versus 15 percent who say they do more to use Americans’ time well.
> 60 percent saying they don’t trust the company at all to protect personal information
> 36 percent of adults view Facebook positively, while 33 percent see it negatively. And Twitter’s rating is 24 percent positive, 27 percent negative.
[0] https://www.documentcloud.org/documents/5794861-19093-NBCWSJ...
Am I correct in reading here that more adults view Facebook positively than negatively?
Interestingly, it also shows 68% of respondents agreed with "The federal government should not break these companies up because competition should be left to the free market without government choosing winners and losers", vs only 28% disagreeing, and for all such breakup questions asked there was 59% that totally agree with not breaking up, vs 30% that agree with breaking up. This is a clear majority in favour of not breaking them up, whereas the majority on HN seem to favour breaking thhem up.
> The views of people on Hackernews don't seem very representative of those of the general population, maybe because hating on Facebook is an excellent excuse for people to feel superior to the general population.
I agree with the part that HN isn't representative of the general population. But I don't think the reason for disagreeing is because we on HN want to feel superior to everyone else (maybe some people do, but I don't think most people here actually think that way..).
The data from the poll shows that a negative opinion of Facebook is not particularly uncommon. It might not be the majority opinion, but it's also not an uncommon opinion among the general public.
Maybe people don't explicitly think that, but people who demand a Facebook ban must at least implicitly believe they're somehow superior to the billions of Facebook users, otherwise how could they justify the notion that they way they want those people to spend their time is better than the way those people have demonstrated they want to spend their time? If I were to say to a grown adult "I demand you stop smoking pot, it's bad for you!", I can't imagine a way I could do that without coming across as believing I knew better than them.
Seems like they're just banning it because they don't understand it.
The poor slobs left holding the Fiat waste-paper...
Would-be volcano-dwelling evil geniuses in the tech world will learn patience eventually. (Arguably, some are - that's why Palantir is such a frightening entity that I'd like to see reigned at least as much as FB.)
ever used a digital system to transfer money? like ideal, bancontact or giropay or just plain SEPA?