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Comment by dpau | Hacker News Reader

Last week I wanted to purchase a used item but discovered that, without warning or notification, Marketplace was deactivated from my Facebook account. My Facebook account is quite active, with posts, discussion in multiple groups, and hundreds of friends. I still have no clue as to what rule I triggered and no recourse to reactivate it. Now imagine that's my digital Libra bank account? No thanks.

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That's a good point, but other companies do this without recourse. Paypal is the classic example. They will literally ban you overnight and hold your funds for months. Oh and forget knowing the reason, because revealing why you got banned would reveal too much about their filter algorithm.

The key is to diversify where you buy and how you buy it so you're not dependent on any one company.

Which is exactly why you can't risk to have anything even remotely approaching a monopoly in any part of the systems involved in making transactions. Which is why I (also as a German) am very happy that we have a competitive (read: better in literally every way) alternative to credit cards, plus a strong cash culture.

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.

> you can't risk to have anything even remotely approaching a monopoly in any part of the systems involved in making transactions.

AFAIK US is a monopoly for international money transfer. You just cannot bypass a US intermediary bank and US Dollar conversion.

And those intermediaries are very closely watched by entities with power to affect the system, not by powerless "consumers" who's only choice is to shrug and choose another provider (if available).

Even between EU countries? I wouldn't think so, but I'm no expert.

EU internal ones are likely an exception. Not an expert myself, it just consolidated in my mind as a fact from all the books and articles over the years.

EU internal transfers are most likely made by SEPA (Single Euro Payments Area) infrastructure (with European clearing entities) or for large sums by direct communication/deals between the European banks. Why would any US entity be needed for this?

Exactly. And since most corporations I deal with have at least an office in a European country, I almost never have to deal with US banks.

International bank transfers within europe most certainly do not go through USD. If you want to send money to/from Europe to USA without a conversion, it is also possible, but you need a bank account in the currency you want to transfer on both sides.

You're likely thinking of the dollar being "unavoidable" as a unit of settlement due to its status as main world reserve currency, but even that's metaphorical and in any case a state & institutional level thing.

Just think about it - how would that even work?

Dollar or not is not that important. Forcing US intermediary is.

There is no forced US intermediaries. What are you referring to?

"U.S. control over transactions within the EU.

..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...

the whole european region (+ schengen) does not use swift at all (at least not since 2018)

Yes, It was noted in this thread few times. I'm talking about all other transfers, not EU-EU. Even then, the wikipedia link shows that one EU-EU transaction which involved USD, was affected.

There is not truth to this. How is there an American monopoly on money transfers?

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).

I regularly transfer money from AUD to IDR or EUR, and from Australian bank accounts to Indonesian or Euro, without any apparent transition with US intermediary banks and USD conversions. I did surprise someone from Eastern Europe when I was in Indonesia that I had never touched USD, so I guess in some parts of the world USD is important.

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.

> I did surprise someone from Eastern Europe when I was in Indonesia that I had never touched USD

Thanks, as I thought, most international money transfers involve USD and, because of USD, have to use US based intermediaries.

Agree with you with the necessity of diversification. The issue is not Facebook issuing its own crypto but rather the potential control we let it take over. I believe that the same reason related to control that an entity can people on people (combined with the new technology) helped to originate bitcoin. The need to ensure no one ( including governments) deciding people's life by manipulating own belongings (by tax or rates manipulation). That's a the same anarcho- libertarian logic approach here. Anyone should be able to decide whether or not putting your eggs in the same basket.

By your logic, banning it through regulation decreases options and hence diversification.

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.

You speak as though corporations and democratic governments are the same thing. The government is (at least notionally) the will of the people. A corporation is unaccountable to anyone but it’s shareholders. It is folly to treat EU legislators the same as Zuck et al.

Isn't the answer better consumer protections, though? Rather than a ban on new technology that threatens the status quo. If Facebook wants to be a bank, they should be subject to the banking regulators and there could be (should be) strong consumer protections preventing the type of corporate behavior you describe.

Doesn’t that just shift the controls on corporate behavior and consolidate the controls into a political process?

https://en.wikipedia.org/wiki/Operation_Choke_Point

which is where you want it, because FB doesn't exactly have a good track record when it comes to customer protection, compared to most EU countries. in fact their track record is both worse and laughably shorter.

I feel there is a conflation here. Facebook is free to apply for a banking license in countries they want to operate as a bank in. Facebook shouldn’t be able to circumvent banking over site and regulations by coming in as a technology company with fancy words. The conflation here is Facebook isn’t being blocked form becoming a licensed bank in Germany - correct me if I’m wrong

But they don’t want to become a bank. They want to build a cryptocurrency. There are already hundreds of cryptocurrencies that operate in France and Germany, and the developers do not have to have banking licenses.

The difference is that Facebook has millions to pour into resources, marketing, etc, while those other crypto currency companies do not.

I would be very very wary of a social media giant issuing crypto. Lots of inherit dangers there.

*inherent dangers

Are we sure those crypto developers are acting within the law? Genuine question.

I have the same question in my first reaction. But then other than some bank owned one, they are not controlled by anyone. Can you access and exchange libra without Facebook account or banned Facebook account

I'm pretty sure you can. They're building a wallet, but it's not the only one. It's also separate to the rest of Facebook but likely would integrate with it well

For sure, the point is having conection to this cryptocurrencie network and a wallet. And its possible to exchange BTC for FBL also.

Even if they don't fall within the traditional banking definition, which I have doubts about, they'd at least play the role of the exchange or broker and as such are subject to, at least, authorization through BaFin in Germany. Random hipsters buying BTC privately and Facebook attempting to erode traditional currencies are two wildly different things.

With Libra, Facebook wouldn't just make itself a bank. It would make itself a central bank. A world wide central bank.

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.

Hundreds of cryptocurrencies that aren't being operated by the most powerful social network corporation in the world.

it's such a small distinction I can see how you choose to overlook it ...

The point is that not even a German bank would be allowed to do what Facebook plans to do.

Europe already has great consumer protections. The US doesn't, and probably never will.

Yes.

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 could be (should be) strong consumer protections preventing the type of corporate behavior you describe

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.

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