I'm of course not familiar with the specific mindsets and the history of this decision, but I want to share a bit of cultural perspective from Germany that is so far not really considered in this comment section:
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!
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.
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.
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.
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.
..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.
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.
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?
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).
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.
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.
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.
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.
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
> 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.
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 was hoping this would happen. It will probably become a EU thing now.
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.
I'm quite fond of the idea of a decentralized currency that nobody has the ability to actively control becoming popular. That would act as a hedge against abuse of power by both governments and corporations.
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.
A really powerful entity, let's say Facebook, or the US government would find it difficult to do any of these with Bitcoin (used as the example because it's well-known):
* 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.
>I'm quite fond of the idea of a decentralized currency that nobody has the ability to actively control becoming popular. That would act as a hedge against abuse of power by both governments and corporations.
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.
There are lots of privately controlled currencies. Miles, points, certificates, game gold, etc. - they are all private currencies. Most of them aren't legal tender, but neither are cryptocurrencies. The only difference between facebook-coin and miles is that Facebook promises to encourage dealing in their coin and airline would frown on that. Not much difference otherwise. You have some tokens that you can exchange for things of value in some places.
> 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.
> Facebook promises to encourage dealing in their coin and airline would frown on that. Not much difference otherwise.
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.
In your exercise in sarcasm you did almost everything except one thing - you somehow forgot to point out where the difference is. Yes, Facebook has a lot of data. And so? How that makes Facebook issuing crypto-tokens dangerous? If you consider the data volume Facebook has a problem, what does this have to do with the currency?
> There are lots of privately controlled currencies. Miles, points, certificates, game gold, etc.
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!
> Yes but these other currencies don’t have the possibility to be the most used and powerful currency for everything you do
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?
> The only difference between facebook-coin and miles is that Facebook promises to encourage dealing in their coin and airline would frown on that. Not much difference otherwise.
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.
The difference is that those other are not meant to be used as a money replacement. In Pokemon Go there are coins and they are nothing but points to spend in store.
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)
You don't tax currency, you tax transactions. And you tax transactions based on the value of the transaction. So if I sell a widget for either $10 or 0.01 BTC, and the tax rate is 10% of the value of the transaction, then I'll have to pay $1 in tax for either of the transactions. If I sell a widget for 0.01 BTC and no other amount, then we can establish the value of the widget from other sources, for instance, someone else might sell the widget for around $10 (implying that it the tax is around $1) or someone else might exchange 1 BTC for $2000 (implying a the tax is around $2). Naturally, if you put the decision of the tax into the hands of the government, they'll take the best rate for themselves. You can avoid this by pricing things in terms of the tax rate i.e. using the government's currency.
> The difference is that those other are not meant to be used as a money replacement
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.
>> 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.
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).
But it could if some folks on the bitcoin team fight with others. Bitcoin is still controlled by humans and thus, not a replacement for traditional fiat currencies.
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.
> not familiar with the specific mindsets and the history of this decision
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.
The primary purview of the state is geography (borders) and taxation (monetary policy). Allowing foreign money to be the primary medium of exchange directly challenges monetary policy.
Let's be honest, if Libra takes hold as Facebook wants it to, given the power Facebook already has over communications, ads and social networks, it very well could affect the capability of states to exert their own monetary policy. Not a single one of the examples you made had such a real possibility of being as big as Libra could be.
It has control as Germany is part of the Eurozone, the ECB is subjected to the EU treaty, operating under its guidelines, and is accountable to the European Parliament, in which the people of Germany have a say. Maybe it is not as accountable as we wish it were, but it is far from what Facebook would be.
Isn't the Bank of England privately owned? Or perhaps it merely was privately owned. If Facebook does this, they had better be prepared to be nationalised.
EU has many checks and balances, is governed by Germany and other like-minded countries, and has given lots of guarantees as well as an option to leave. If Facebook decides to discuss on that level, maybe an actual agreement could come out of that.
Facebook can come and expect to discuss on the level of trust that a country gets when it has existed for less than 2 decades and has been treating its citizens/users like an authoritarian dictatorship surveillance state. There are a number of other parallels, and none of them put FB in a good light.
If the EU goes tits up, Germany will be using marks again before the month is out. The EU could never have been started if member states had to give full control of monetary policy to the EU Council.
Facebook has a non controlling stake in Libra. Libra Foundation is an independent, not-for-profit membership organization. Do you feel a similar threat of non-profits that try to give financial opportunities to people around the world?
Libra Foundation is a foundation established by Facebook with members like Mastercard, PayPal, Stripe, Visa, Booking, Vodafone or Uber, among others. Calling it a non-profit is a technicality. It is a currency controlled by for-profit organizations. It doesn't have anything to do with actual non-profits.
Are you (1) employed by the Libra Foundation or Facebook, (2) in possession of a large Libra stake, or (3) duped by the marketing and in possession of a large amount of free time?
Not everyone who disagrees with you is a paid shill. Responding to a legitimate argument with some kind of absurd accusation will always make you look like you lost the argument.
1. No. I have a facebook account but I haven't posted in years
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
Did they not lose you as soon as you read "blockchain"?
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?
Montenegro has a population of about 600K. Its annual GDP is $12 billion.
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).
> I'm still uncertain whether the state should even have the ability to block these
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.
That's a good point. Besides the potential dangers of allowing a tech company (one with no ties to your country) to run the money supply, there is also the understanding that you (as a smaller country) are inviting even more U.S. monetary policy into your country.
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.
Because we didn't see any of this. We can't moderate what we don't see. That's why the site guidelines ask you to flag comments that shouldn't be on HN, and in egregious cases to email hn@ycombinator.com. To flag a comment, click on its timestamp to go to its page, then click 'flag' at the top. (You need karma > 30 before flag links appear.)
Please assume good faith and discuss the topics directly. What is it that you find debatable about my comment? I've always made good faith efforts at productive conversation whether someone agrees or disagrees with me on something
What evidence of bad faith are you referring to? Interesting how you and "other people" going through my comments have no actual objections to the content of what I say. Hard to have a productive conversation when all you have are dismissive remarks and insults.
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.
With respect, and despite being completely off topic:
> 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.
>Sure, I will try to unpack my thoughts.
>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.
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?
> Hey do you mind if we just skip the paperwork part and just control currency, while actually being a social media tech giant
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.
Then create a bank. But that's not what this is. They want to make a bank that prints its own currency and skips the paperwork needed for current monetary exchange. It's just as OP has said.
Banks don't follow full reserve banking. They follow fractional reserve banking. When you put 1 Euro in the bank, they have discretion as to how to invest this amount and only need to keep a fraction of your money in reserves. With a bank I'm also stuck being exposed to the currency of my account. And European banks often have fees or minimum balances. Libra offers benefits to banks and is safer.
[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.
How is Libra a full reserve bank if investment is how they make their money? It doesn't sound any different at all except there's no regulations and no government backing (such as FDIC guarantees).
> 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]
That doesn't sound like a full reserve though as its not 100% cash. It says right there that its partially invested in risky assets. Whether they're low risk is just an opinion.
But even assuming it was a full reserve, I don't think its fundamentally different enough to be allowed to skirt the existing laws.
Fair point, its not cash. But generally in banking, cash and cash-like products are equivalent. I think they'll make public the actual investment breakdown.
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?
> But generally in banking, cash and cash-like products are equivalent.
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.
> 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?
>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.
> Should Starbucks be regulated as a bank because they let you prepay for a cup of coffee?
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).
> Should Starbucks be regulated as a bank because they let you prepay for a cup of coffee?
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.
> 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]
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.
> When you put 1 Euro in the bank, they have discretion as to how to invest this amount and only need to keep a fraction of your money in reserves.
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.
> > > 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
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?
Libra is meant to be safer and better than a bank. Seems almost impossible to fail, it has 100% reserve backing while banks have < 2% in europe. It supports instant payments even in the most remote regions of the eart. It will be a terrible competitor for banks, if it works. The problem is that it s backed by a conglomerate that is too big to trust.
Indeedy. My country has 7% inflation. And that calculation is done by the very state that is responsible for inflation so their word on this only means so much. Any other currency or store of value that solves this is more than welcome.
"capital controls" generally includes foreign exchange controls, i.e. restrictions on conversion to foreign currency and local use of foreign currency.
Not in Sweden anymore, most of the lunch places in Gothenburg where I live don't allow payment by cache anymore. If you have money but not digital, you will go hungry nowadays.
This would never fly in Switzerland. You need to accept Swiss Franc Banknotes of any denomination as settlement for any monetary debt (this includes a purchase of a 1.- stick of gum paid for with a CHF 1000 Bill. there will be some arguing required for that one in practice, but the law is clear).
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.
You say that, Espresso is a good source for this kind of thing and I'm not saying your wrong. But the letter of the law does state that everyone has to accept Swiss banknotes with no restrictions.
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.
As I understand in the US a purchase is not the same thing as a debt, i.e. nobody has to accept any particular type of currency for a purchase, only for a debt. Is Switzerland really different here?
Is that even allowed? I don't know the specific law here, but in my country (France) a shop can not legally refuse to be paid in the legal currency (in cash). It can refuse credit card or checks, though.
How I wish it was this way in Sweden. Unfortunately it's not - there is no requirement to accept any specific kind of payment and it's by now rare to see anyone pay with cash.
This is the first time I've heard of something like this. I grew up in Greece during the mass deflation of the currency and people wouldn't accept anything but cash. Interesting to learn that it works both ways.
Sure but how is that an investment return? Usually when you hear "take a portion of the investment returns" you're thinking expense ratios, some small fraction of the returns that the user is getting.
If the user gets no additional returns, then it's just a fee, no?
Validators pay $10,000,000 for the privilege of processing transactions and collect transaction fees and can probably resale that privilege with a premium based on their absolute return, which would be called yield. They buy originally from the foundation, and thats how the foundation makes its first $1,000,000,000 dollars. These validators and other accredited investors also get access to a completely parallel asset called LIT, Libra Investment Token, which has value based on typical securities fundamentals.
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.
Which is one reason why capital controls are so destructive. Allowing denizens to keep their savings in whatever form they so choose is a human right. Libra will afford people the option to invest in and use a token that is backed 1 for 1 to a basket of global currencies and government bonds at a low cost.
The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism—ownership of government by an individual, by a group, or by any other controlling private power.
They've also been associated with places like Finland, Israel, France, and the UK. Capital controls are just a necessary enforcement mechanism for attempts to control the exchange rate of a currency.
You're assuming those people are not forced, tricked or otherwise persuaded by a company worth hundreds of billions of dollars, to use Libra. And that company has every incentive to do what I listed above. It also has very shady morals, as proven repeatedly.
Yes, it's a small individual loss (not being to invest in Libra) but probably a big collective gain.
> You're assuming those people are not forced, tricked or otherwise persuaded by a company worth hundreds of billions of dollars, to use Libra
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.
It’s interesting because I agree with you and those are good examples, but there seems to be a contradiction here.
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.
If this was purely launched as an investment vehicle that people could put their savings in, I am not certain that the regulatory response would be the same. This is a mischaracterization of what Libra even intends to be. It's marketed as a new financial system if you read their whitepaper.
However its never been the case that people are allowed to keep their savings in whatever form they wish. I'm not permitted to for example save all my money in a ponzi scheme or invest it in a futures contract backed by the afghan opium crop.
> Libra will afford people the option to invest in and use a token that is backed 1 for 1 to a basket of global currencies and government bonds at a low cost.
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.
The original comment is about German attitudes towards the accumulation of power, which are a direct product of their experiences with Nazism. Germans don't want uncontrolled groups accumulating power precisely because it could lead to a situation like Nazi Germany.
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.
I'm no historian, but it seems to me the hyperinflation of the Weimar Republic, and the resulting destruction of many Germans' life savings, were a big factor in why Hitler's rhetoric was appealing to many.
So we could say that one of the motivation of Hitler's rise to the power was the decision of Wilhelm II (Emperor of Germany) to entirely finance the first war by borrowing, that led to the hyperinflation.
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.
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)
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:
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.
From my perspective I think the EU/UK talks have gone nowhere because the brexiteers didn't have any strategy at all. It boils down to playing chicken and thinking the rest of the EU will flinch at the threat of the UK cutting all ties, when it has been clear that the UK (under May and now Johnson) desperately wants those ties. But the UK is not willing (or politically able) to make any concessions for those - concessions that other states had to make before, to make the same deal. They're not just selected arbitrarily.
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.
"The EU" means both the institutions and the whims of a handful of national leaders. Nothing about what it does has anything to do with the will of its people. Where is that even measured? The text of the Withdrawal Agreement was written by the Commission, which controls the negotiations.
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.
> 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.
I meant in the sense that most newspapers and media outlets are pro EU. Yes, the few that aren't have higher circulation. You can't easily disentangle cause and effect there though: do people read these papers because they feel they're presenting a more realistic view of the EU/the world, or do they decide what a realistic view is based on the papers they read?
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.
Actually they are much better! Trump ran on an explicitly populist platform ("I listen to you, the elites don't") and Johnson is currently staring down the threat of a jail sentence because he's trying to actually leave the EU, as voters requested. They are much more guided by what's popular with voters than EU leaders are.
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.
What Trump ran on and what Trump does are two different things.
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.
So Trump ran on basically the same platform as Hitler ("I listen to you! I will fix things and make us great! Other people are bad and a threat to us!") and you think this is better?
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.
Lage der Nation had a really good summary of Libra and summarized a lot of the concerns, especially on why this is not a case where you can let them do their thing, and regulate afterwards, when you've gathered some experience:
You sound like somebody tried to force you to trade in Libra and German government prevented it. But Libra is not money - unless you choose to trade in it and use it as medium of exchange, and nobody so far tried to make dealing with it involuntary. So what exactly German government saved you from?
It saved me from having to live in a world with an overly powerful, not democratically legitimized financial entity. Given the power cooperations already yield this is a _good thing_ in my view.
> It saved me from having to live in a world with an overly powerful, not democratically legitimized financial entity
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.
Banks are heavily regulated, and Libra would not be just another cryptocurrency. It's reasonable to expect that it would have been (and still might be) considerably more powerful than any one existing bank.
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:
The strange part to me is just that there are already hundreds of crypto currencies available in Germany. When the government says that yes, these hundreds of currencies are fine, but Facebook can’t create one, then it just seems like the policy is anti-Facebook for the sake of being anti-Facebook.
It's legally tricky to be anti-Facebook for the sake of being anti-Facebook, but I don't think it's morally tricky.
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.
“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
>I'm not sure that we as a society have ever dealt with a non-state actor this powerful before.
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.
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.
It is unrealistically limiting to think modern wars are fought only with armies. Most wars are quiet and fought with capital, thought, rhetoric, and policy. Armies only come into the picture if all else fails.
It seems we are splitting hairs here on the definition of "war" and missing the actual message. Since you brought it up again.
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.
[edit/ downvote this all you like, pretending like warfare requires guns and armies when 2 different government elections have been attacked using social media, namely Facebook.]
> 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.
One could argue they have a higher GDP and population than most countries right now (all depends how you measure “power”) but I’m with you: if it went down tomorrow, I’m not sure what the world would actually be losing, nobody would die, and the world would keep spinning.
There is zero evidence that any activity conducted on Facebook has ever actually swung a single election. As far as I can tell, that is hyperbole as well.
"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."
Nothing you provided is evidence that any Facebook activity has ever swung any election. The very people that paid Cambridge Analytica for their services in 2016 said that the company’s strategies were ineffective at best, referring to it as “snake oil” [1]. You have provided evidence that people attempted to use Facebook to swing an election. Those two things are not the same.
They have tried to swing elections and broke electoral law in UK.
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.
You may believe Faceache broke electoral law in the UK; but they have neither been charged nor convicted. So your belief would be false.
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.
> You may believe Faceache broke electoral law in the UK; but they have neither been charged nor convicted. So your belief would be false.
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:
What you are asking is impossible. How do you want me provide evidence? Fly back in time and stop facebook interfering? I can flip the question, why would politicians use this setup if it was not working?
The point is that Facebook ads, regardless of how precisely targeted they may (or may not) have been, did not sway the 2016 election, and I am not aware of any other election Facebook is even thought to have had any effect on. The whole “it’s Facebook’s fault” narrative was shaped by a liberal media desperate to explain why they were unsuccessful in influencing it themselves. Rather than accept the fact that they had simply a run a fatally flawed candidate, and had alienated large swaths of the country by calling them stupid for not agreeing with every one of their views, liberals found a scapegoat: it was Facebook’s fault.
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.
Having lost the popular vote, but winning the presidency with a margin of 77,744 votes in specific locations, it is not hard to imagine that Trump's success could have been thanks to carefully targeted political ads.
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.
Yet, western democracies have been centralizing more and more power every year. It's more that a premise is that western democracies want to increase the power of the government and no one else.
Well, on the bright side most democracies are not explicitly about profit-making and/or cost-cutting as their first priority, even if it's the first priority of individual politicians.
I would agree with your statement that most western governments are not explicitly motivated by cost cutting and profit seeking. It would seem evident when we look at the trajectory of the US national debt in the past 40 or so years. However, I do not know if this is a good or bad thing. Will the national debt ever be paid off? And if not, what will the consequences be?
A nation paying its debt would actually not be as beneficial as you think, considering today's society runs on debt, having it is actually beneficial to an extent for relations, trade, to avoid war etc.
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.
Is it only western democracies that you think have been centralizing power? What about countries like China, Iran and Russia?
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).
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.
Amazon is surely big and rich, but do they really exert the same psychological/social power on you? You don't read your news on Amazon, you don't send messages to your closest friends on amazon, you don't go down reading rabbit holes from following links on Amazon (not really, anyway).
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 guess Amazon is maybe not as powerful as Facebook, yes. I was thinking about it also in terms of AWS and such, but I guess that Amazon can't really convert that into an evil master plan in any way.
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.
While I agree that Google is more powerful, remember that even if you or your friends don't use Facebook, many of the sites you visit do - so unless you've got pimped out tracking protection (which as a HN user you probably do, but maybe your friends don't!), Facebook still have a good idea where you're moving throughout cyberspace
Why is Facebook more powerful than Google/Alphabet?
> 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.
Facebook has way more control over the social fabric and distribution of information than Google does. We've seen violence-inciting disinformation campaigns spread through Facebook and rack up a literal death count to the point that governments have angrily demanded intervention from FB with the result of FB shrugging their shoulders and going 'our bad, we didn't hire enough moderators'.
Not really though. Apple and Alphabet effectively could cripple Facebook. We are already seeing some of this take place with Apple banning Facebook's VPN apps, options on data shared with apps and by rolling out its new app sign in with Apple feature.
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.
> We've seen violence-inciting disinformation campaigns spread through Facebook and rack up a literal death count
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.
I think you’re underestimating the impact of YouTube. Its driven to prominence extremist ideologies, especially on the far right, that would have had difficulty finding purchase via traditional media outlets. And especially among young, alienated men, who are historically more prone to violence. Just look at the case of the New Zealand shooter and the subsequent violence he has inspired.
I still remember back in the late-noughties when the DOD was inviting arabs to come to the U.S. and attend workshops teaching how to use facebook to organize insurgencies. That stuff is out of fashion now, but we were oddly okay with it back during the Arab Spring.
Europe has developed a fairly anti-US-big-tech attitude recently. As a Brit I kind of understand it. We probably don't benefit from importing all of our 21st century products and services from the US, especially when these companies don't pay any taxes in our countries.
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.
> Europe has developed a fairly anti-US-big-tech attitude recently
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
For all of the companies you mentioned: taxes. They all use either a double Irish with a Dutch sandwich, or are incorporated in a tax haven (Uber, Amazon in Luxemburg)
It amounts to "these multinational companies employ armies of accountants to use every trick in the book to avoid paying taxes on all the sales they've made in our country, and it's not fair"
There's a key difference here in that Libra is a permissioned ledger in a fundamentally different way. One could argue that PoS-based blockchains fall under that as well, since you need to acquire tokens to stake to become a validator and the tokens need to come from somewhere. But if we take Ethereum as an example, they have been under permissionless PoW for years, the tokens are traded on public markets and the capital that needs to be locked up i order to become a validator node is ~6,000 USD with today's ETH price.
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.
Cryptocurrencies like Bitcoin are usually by design not controlled by anyone but the users participating in mining and trading it. Banning that is like banning people from trading in carrots; you can't.
It's very different when there's a company with its own financial interests manning the door, regardless of what company that is.
Well the decentralised nature of most crypto currencies prevent this sort of ban, but a centralised offering from a known entity is a lot easier to block. I would also say it is better to block it, especially with Zuck at the helm, he has proven he cares nothing for regulation or laws in the nation's in which FB operates. At least bitcoin is consensus driven,libra will be driven by Zuck and the tech giants. No thanks.
> Well the decentralised nature of most crypto currencies prevent this sort of ban...
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.
Ideologically, at least, extant cryptocurrencies aim to decentralize power, whereas the OP was saying that German resistance to Libra comes from a concern about the centralized power it might afford. That's not mere bigotry.
I think it's more of an anti-tech mindset more than an anti-Facebook mindset. If Google did this, I imagine that Germany would be just as upset.
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.
I think the way Facebook did this was the right way. It set up Libra as an independent non-profit and they have a non controlling share. The founding members include Stripe, Visa, Mastercard and PayPal.
All the media coverage on Libra is incredibly dishonest and ill-informed.
Yes, but Facebook will have enormous power in this deal as they own the platform.
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.
> 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
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]
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.
The consortium is like a rogue's gallery of companies I distrust though, so I'm not sure decentralizing my deep distrust is going to help the Libra project.
How many of those are backed (edit: created and fully controlled) by a foreign company with 2.4 billion active users and extremely questionable privacy track record?
As another commenter noted Facebook does not control it.
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.
This is a very good description of your argument. It may seem like an unfair stance - I'll try to show why it might not be a crazy position to take.
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.
That's because they have a clear way on how to stop facebook while they don't really know how to stop decentralized crypto (whose whole point is to resist state interference).
Yes, distributism has been a founding principle of post-war europe. Not just in Germany but in all of western europe.
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.
Germany is obviously somewhat keen on letting single entities get control of everything, as the EU is in many ways an extension primarily of Germany, and the closest entity I'm aware of that could be said to be doing just that.
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.
> Germany is obviously somewhat keen on letting single entities get control of everything, as the EU is in many ways an extension primarily of Germany, and the closest entity I'm aware of that could be said to be doing just that.
I'm not sure a union with a democratically elected parliament is comparable to a social media corporation which answers to its shareholders?
> monetary systems operating outside of the state could be argued to be one of the strongest weapons against tyranny
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).
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.
Is it just another kind of foreign currency, not controlled by German government. The reason why bitcoin is popular is that people believe governments and central banks cannot be trusted, and they are evil anyway.
I understand why the governments do this, because they fear losing control.
That's for the theory.
In practice, Bitcoin is popular because it allow you to speculate on an instrument easy to manipulate if you have enough funding and because it allows you to buy drugs on dark markets.
Beside that, due to the volatity of Bitcoin, it has no practical use.
That's not "the real figure", that's a UN estimate.
If you want the real figures you need to ask the German Statistische Bundesamt. Which put the number at 22,5% in 2016 [0], at 23,4% in 2017 [1] and at 25,5% in 2018 [2].
Keep in mind that those numbers are averages for the whole country and thus can be very misleading in their individual effects on each region. Because a whole lot of regions that previously had barely people with a migration background, at least from the MENA regions, have now seen a surge of MENA refugees.
This has visibly changed the landscape in some cities in the East, in the West not so much because Western Germany already had a lot of Muslim migration for decades, tracing back to literally mail ordering Turkish guest workers from Istanbul. That's why in many bigger Western cities you will find very "diverse" districts often referred to as "little Istanbuls" and Döner shops are abundant everywhere.
Thus in West Germany MENA refugees usually have an easier time integrating and finding contact trough the established Muslim sub-culture there.
The same does not hold true for East Germany, it doesn't have such a history of Muslim immigration, what is there in migration background is mostly from Eastern Europe, a bit of Vietnamese, due to the GDR times. But what the East did and still does have: Lot's of cheap and affordable housing, room for the federal government to cheaply "store" migrants.
By now many Eastern German cities kinda look like their Western counterparts but in a way sinister way: Large groups of young men just hanging out around the Plattenbauten they were put in, with everything from families to pensioners living right next to them, and yes crimes have increased because those guys also can't work (wouldn't want to steal a German the job), so they have nothing to do but hang out and get bad ideas.
> 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.
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.
So people or governments are not allowed to make mistakes and learn from them? If, apparently, something likewise happened in the past and caused lots of problems, the German government should just let it happen now just so that it isn't 'ironic'?
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.
But this behavior is not an example of learning. In fact, as Libra could potentially limits government power and encourages sound money money, one could argue this is the opposite of the dangers you mentioned.
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.
Well it seems like the German government is worried about Facebook controlling money, not cryptocurrency per se. And I completely agree with that. Facebook creating money and everyone switching to libra sounds very dystopian to me.
As nobody would be compelled to use it, and those "everyone switching" network effects only occur if it has merit, I'm a bit more concerned about the banning being "dystopian".
Yes, I don't think we are disagreeing here. Perhaps I should have said intention of regulation instead of regulation. The past events showed that the regulation was rotten, not watertight and prone to abuse. Thus there was a restructuring from the ground up, not only in the law but also in culture, and so Facebook's behavior is triggering all the red flags.
Ironically, Germany generally also controls the Euro for the so called PIIGS countries. For all intents and purposes the euro is just as much as an externally-controlled entity as the Libra.
Maybe not "imposes" , it's voluntary participation. But there is no easy , not even intermediate route out of the Euro. And as money, it's not much different from a hard currency you can't control for countries that can't catch up with the developed economies of the north.
The "liberal with the truth" bit isn't about the ability to exit; it's about the EU being "externally controlled". The EU is an organization of which each Eurozone member is, well, a member. They have votes in the EU Parliament and European Council (the latter is responsible for appointing the ECB president) and a say in deciding the membership of the Executive Board.
(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.)
i meant that the Euro, as national currency of italy and greece, is "externally controlled", cannot be bent to the needs of those countries , but to the needs of germany. Eurozone is not the EU
The Eurozone is a subset of EU members; decisions about the governance of the Euro are made by the Euro-using subset of the European Council (the upper house of the EU legislature, representing member states directly). Germany has a voting share on the Council proportional to its population.
Germany's outsized influence came 25 years ago, when it had the dominant part in writing up the rules and powers of the ECB.
germany has outsize influence, whether it is by choice, and whether they like it or not. Their decisions have such effects as bank bail-ins and capital controls in other euro countries
Not really. Germany effectively controls the euro, and it's not a great thing for many of its member countries. It was entered into as a union, sure, but now it's effectively a prison.
The first poster compared a proposed digital currency--one that no one might ever even use--to Nazi-era fascism and an assault on democracy.
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.
Well, "forced" is probably a bit strong. German manufacturers need markets; Germany "encouraged" the other members of the EU to allow countries like Croatia and Greece to accede, even though they didn't meet the entry requirements.
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)
dude are you for real?
Germany is one of the slowest moving countries in terms of innovation (minimum 1 month to setup a business) while maintaining a high level of corruption, Deutsche bank, pharmaceutical companies etc etc.
They give no shit about protecting anything but uncontrolled money flowing around without them being able to do anything about it.
Germany is notoriously anti credit cards so no surprise when it comes to them. Its a stupid move of course but my guess is that they are worried it will be successful and threaten the EURO.
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.
Strange, I'm living in Germany, hailing from Baden-Württemberg and now been living in Northrhine-Westphalia for almost ten years, and I cannot remember a single restaurant that doesn't accept credit cards. And I'm paying almost everything with credit card.
Sure, the ice cream stand at the swimming pool only accepts cash, as does the local discotheque, but restaurants? Never a problem.
As a foreigner who lived in Germany for several years until recently, my experience is also that cards were accepted at 50% of places at most - often with a minimum purchase, and usually no contactless.
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.
It's basically the opposite in Sweden, if you don't have a credit card but just cash, you will at least in Gothenburg where I work go hungry during lunch.
When it is the majority of the population, it is beyond a personal decision.
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.
When it is the majority of the population, it is beyond a personal decision.
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.
A debit card is just as cashless, what is your reason for using a credit card?
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.
Most of these "credit cards" in Germany aren't really credit cards though. They take the money from your account immediately instead of sending you a monthly statement and letting you decide how much you want to pay towards your credit.
> 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
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.
>> 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.
Interesting. But contrary to how you sell it it's the big German state that again knows better what's good for people. With that said it's not an opposite vector to some foobar from the past. It's the same foobar as it was in the past. No kidding. The big state is a problem. State having less and less control over people liberties would be the right direction and the opposition to that foobar. And not state telling people what currency they should use. Definitely not. I have spent past few years in fintech, mostly in crowdfunding. The lesson learned is that state is the biggest problem in many countries. Free People should have an option to make mistakes. If people are naive enough to buy shaky crypto they should be allowed to do it. And most countries at least don't penalize crypto. Here the problem is not the good of German citizens but who controls value flow . With this huge consortium behind libra, not just Facebook, it would be the first time in the crypto world where crypto would have a real chance of being used for transaction and not for investments, which may go totally in the interest of most Germans. All but the people that benefit on the endless quantitative easing cycles that Germany controlled ECB keeps injecting. Average German folks will lose on this ban.
Ironic that the German government wants to avoid irresponsible monetary policy through a private entity when it is literally printing money to stimulate growth through the ECB.
Monetary and fiscal policy is not the same as us balancing a checkbook at the end of the month. Money is created over time for many reasons, on a micro scale for stimulus, and on a macro scale because the economy grows over time and money represents a slice of economic activity. Keeping it from going up and giving disproportionate gains to money holders past is part of the job. There's nothing ironic about it, this is the job of central banks, and there's nothing shady about it.
>Keeping it from going up and giving disproportionate gains to money holders past is part of the job. There's nothing ironic about it, this is the job of central banks, and there's nothing shady about it.
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 no need to print money in a growing economy...
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.
>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.
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.
> 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.
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.
>The poor tend not to have much savings, by definition, which means that all this win goes to the already wealthy.
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?
You've kinda dodged the core of my argument: why should your money be worth more later than it is today even though you're not doing anything with it? And further, if you think money should be backed by gold, why is it not sufficient for you to simply buy gold with your fiat as you earn it? I'm having trouble understanding why this fails to meet all your objectives.
>Monetary and fiscal policy is not the same as us balancing a checkbook at the end of the month.
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).
Right, a technically private institution which is built on capital of all EU member states and tightly knit into the complex web of EU entities is literally the same thing as a social media giant who denies even conducting business at scale in Germany or France to dodge taxes and comes freshly out of manipulating the US elections for profit.
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.
It's pointless because you're not going to persuade anybody, but rather recapitulate a timeless, tedious dorm-room argument. The article is about Germany and Facebook. It isn't an essay on whether central banking is evil.
That’s a very typical German mindset. You implicitly assume that nothing good can come out of Libra so it should be banned from the beginning. The pragmatic approach is to wait and see what happens. Most likely, it won’t be as successful as you assume it will be. Also, there are plenty of other forms of private money out there that you don’t seem to have a problem with (e.g. credit cards), as well as foreign currencies. Why do you think using Russian rubles for payments should be perfectly legal but using Libra for payments is completely evil? It does not make much sense to me.
Sorry, no. This is just reckless. I'm trying hard to assume good faith here.
"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
Why are you so convinced that everyone would immediately want to use Libra? Do you think the Euro is such a mess? If that’s really the case, wouldn’t some people using an alternate currency be a step forward?
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.
You're making his point for him... waiting isn't helpful, since it either won't work out (and little value would have been lost if banned) or you'll end with regulatory capture and loose your ability to regulate/ban.
Well, at least Germany can get a jump on banning automated driving development. Hopefully BMW, MB, and VW are all banned from working on it since it's still early enough to prevent bad things from happening.
I could say it's hard to assume good faith from you. You're making ridiculous leaps. We'd be stuck still riding horses and buggies if people had your mindset in the early 1900's.
If they just took the “wait and see” approach and some fraction of the population took it up, they’d find themselves fighting against a group of citizens with vested interests, and the corporations would say “you can’t take this away from these people” much like the gun lobby does in the USA. The real “wait and see” approach is to prevent it get a foot in the door, see what happens elsewhere, and then perhaps repeal the decision in the future.
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.
>Providing for security is also inherent to sovereignty of nations, but private security firms flourish.
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.
The monetary policy of the currencies underlying libra are also fully determined at the behest of their respective nation states (or centralized monetary authority in the case of the EU). So, actually not that flawed. Governments and central banks are foolish to not get behind something like this because the alternative is something they can't influence at all like Bitcoin which maintains no peg to anything they do.
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).
Yes, Bitcoin is relatively speaking a pure idea. It competes in the realm of other pure ideas. At least, if we are unmooring ourselves from national identity it is a clean break with new dangers and new opportunities.
Libra is an idea AND a political entity, which feels like some mixture of status quo and new world which makes me uncomfortable.
What would the assets generate revenue based on? If it‘s fiat currencies you still have exposure, if it‘s Libra you run the risk of currency panic and it‘s not dissimilar to a fiat currency panic except there‘s nothing really available to stop precipitous economic effects.
Gov bonds, corporate bonds, REITs, that today all pay USD, or Yen, or Euros, or what have you. So still based on fiat. Except this revenue basket just looks like an opaque, complex security, and we saw how well that turned out during the last financial crisis.
i don't think the goverments are foolish in this regards.
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.
Pretty much everything Academi/Xe/Blackwater ever did was at the behest of the US government. GP was talking about a scenario such as Apple hiring Academi to destroy Samsung's factories.
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 Pinkertons are considered the epitome of the "Wild West" - that is, the total lack of state control of law and order in the American West. Their intervention in strikes in the East is, to put it mildly, not a good example of law and order and a functioning state.
the last time I heard something about asgaard was years ago but as far as I know they're almost exclusively in personal security.
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.
If the UK is part of Europe, there are Aegis, Erinys, Control Risks, STEPP, and many others. In France, there are Æneas, Anticip, Corpguard, Défense Conseil International (linked to French government), GEOS, KB (they specialise in private arms trading), etc.
Let's get real for a minute: France and Germany do not want Facebook, of all businesses, to monitor most private monetary transactions. Yesterday a social network, then a press/media entity, now a "central" bank with no traditional jurisdiction but its own private virtuality? It's preposterous, particularly considering the track record of this company.
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.
> 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
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's also odd in the context of Germany in particular where a private currency has been used for many years:
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.
Your German example is a bit silly to use here given that its exchange rate is 1:1 with euros. There are other regional currencies in other countries, they don't usually operate independently from the country's own currency though.
Yes - you have to be a member of the Chiemgauer e.V. association in order to use or accept the vouchers, which is why it's called "vereinsintern", i.e. "internal to the association". It's not a general-purpose currency.
IANAL, but the association giving out the vouchers would probably sue for fraud, since the merchant acts like a member of the association even though they are not.
Not quite the same kind of inflation hedge as "free floating" limited-issue cryptocurrencies then?
(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.)
Note that Asgaard is not operating on behalf of the German government. The service it provides is completely different to politically expedient way of projecting military power by the state.
So is Academi. Their primary mission is protecting corporate interests in unstable countries / war zones. Asgaard used to do the same (I am not sure if they still exist).
Academi a.k.a. Blackwater of "Nisour Square massacre" [1] ? Same company whose founder is pitching "to deploy a private army to help topple Venezuela’s socialist president, Nicolas Maduro" [2] ? Same company that is now a member of the Constellis Group[3] ?
Pardon me for not taking the corporate rebranding shenanigans too seriously.
Well, Maduro put Venezuela into deep humanitarian crisis already, with looting and starvation abound, so it is pretty normal that somebody wants to do something about that. Even if only for profit reasons.
This clip from Mr. Robot S02e11 regarding eCoin, substituted with Libra in this case, maps suprisingly well to the hypothetical narrative on the shifting nature of skewed monetary power.
"Be my guest, regulate the sh1t out of it. I'll give you side-doors, back-doors, trackers, whatever you want. Just don't shut it down." Intense scene.
Good decision by Germany/France on this one. This is the kind of thing has to be stopped soon because once it starts being popular it becomes more of a corporate power-capture pandemic.
Those regional currencies have popped up several times, the Chiemgauer is just the only(?) long-living one.
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.
Should I give you the list of EU private military companies? It is even more fun as the UK is still part of the EU, and the British have practically invented the concept, and still prevail on the market.
> Alternatives, especially private alternatives readily available to citizens, will increasingly be viewed as the enemy.
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
There is a quibble to be made although in the main I'm quietly nodding and agreeing.
> 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.
"Providing for security is also inherent to sovereignty of nations, but private security firms flourish."
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.
> “no private entity can claim monetary power, which is inherent to the sovereignty of nations”
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.
You are exactly right. Private currencies will be seen as the enemy, because they are a threat for exactly these reasons. Mall-level security is one thing, systemic monetary power quite another. A Europe which relies on private currency is a continent without controlled inflation, meaning you can just sit on your holdings and do nothing with your money (meaning actually doing nothing, not investing, not giving it to a bank for them to invest. nothing) and yet stay rich. the decrease in investment would mean it gets harder to fund any kind of business. Economic problems would be very hard to fix without the ability to pump money into the system. Also with competing currencies there is potential for chaos. One currency with a lot of savings might just fall over the next day. governments would be asked to convert tax money to prop them up. the euro is good enough for now. maybe it can in the future be modernized with blockchain like technology to get the benefits of currency technology without incurring systemic risk. i dont think there is much choice for europe but to ban these things eventually. especially since facebook is a foreigh company.
> “no private entity can claim monetary power, which is inherent to the sovereignty of nations”
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.
Yeah, very confusing statement - would they use this same logic to ban Bitcoin or other cryptocurrencies as against their soverignty? Do they treat gold similarly?
«Yeah, very confusing statement - would they use this same logic to ban Bitcoin or other cryptocurrencies?»
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.
If "monetary power" is "inherent to the sovereignty of nations" (quoting the article), they're also against bitcoin.
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."
No, read very carefully the way they worded the sentence. What is "inherent to the sovereignty of nations" is not "monetary power" but "no private entities having control of monetary power".
They are not saying governments should have control of this power. They are just saying no private entities should have control.
> 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.
Since I am getting downvoted: Is this a Continental English vs. American English thing? Because as a native American English speaker, there is no doubt at all what the sentence means in American English.
It's a pretty obvious term. Obvious in the way that it includes Libra (where Facebook is a private entity), and excludes something like Bitcoin which is not directly controlled by any such entity.
"Private entity" is more of a legal term than anything else (than common english). That's is exactly why it's obvious, because it is used in an official document, which is not likely to use the common english definitions and use more legal ones.
Please stop calling me dumb. I'm not dumb. This is my second time asking.
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.
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.
mrb's comment that "we will block Libra and we will not block Bitcoin* as some sort of tacit approval is bullshit.
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.
France & Germany could block or ban Bitcoin if they wanted to, just like China. The fact they don't imply they tolerate Bitcoin. They tolerate it because it isn't controlled by a private entity.
Well that one is easy to answer - it's obisouly in the term "private entity". Bitcoin is not a private entity, corporation or even a determined set of individuals. Obviously neither is gold itself.
> 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 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.
Germany has zero interest in devaluation; in fact they've been accused of being far too strict in Euro monetary policy, with the 0-2% inflation target.
Germany has profited immensely from the use of the euro in foreign trade. Had it kept the Deutschmark, German exports would be by some esteems 25% more expensive than they are now, given the strong fiscal position of the country.
Germany is in a unique position of being able to jawbone about devaluation and monetary policy while reaping the rewards of spendthrift member states.
When you replace "Germany" with the german state or its tax revenue I would agree. Having a low value / devaluing currency goes to the disadvantage of people getting their salary in that currency.
it's also great for people running businesses which exist to nominally try to protect wage earners of that currency from inflation, e.g. pension funds, investment firms, CEOs.
"Germany has zero interest in devaluation; in fact they've been accused of being far too strict in Euro monetary policy, with the 0-2% inflation target."
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.
Is there any sign of a crypto currency that people want to use? Libra is an unregulated, centralized bank account that hides behind a blockchain. I still think it might succeed on social effects if it allows e.g. organizing betting pools and paying out without Libra backers getting their hands dirty—if anyone can sell that it’s Facebook, a reliable social institution, for better or worse. But generally there’s no strategy for luring people into the market and away from cash or cards.
Chiemgauer is run by a non-profit and is a regional currency designed specifically to avoid international interests removing money from the area. My home us county has some terrible incarnation of them. Calling it private (implying for profit, in my mind) or at all comparable to Libra requires some flexible thinking when it very different from the Chiemgauer in every sense EXCEPT being run by a non government entity.
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.
"Providing for security is also inherent to sovereignty of nations, but private security firms flourish"
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?
I am pointing out that everyone has heard about hyperinflation crisis, and many people in this thread are pointing fingers and writing about it as if it a series of contiguous policies followed as a logical consequences. That's not a fair statement because there were several violent changes of government, with different monetary policies. And many gaps in your (and mine) understanding in how these regimes manages economy. Can you, or anyone else here, really comment on monetary policy of nazi germany without looking stuff up?
That's why I think, that, to claim it's not fair to reference things that happened "100 years" ago in germany. In US, which does not have such background, that would be more reasonable.
There’s a big difference between a local currency in a small region, or even a distributed crypto like bitcoin, and someone like Facebook. When Facebook starts pushing in a direction towards being an independent state-like power, you have to remember they have a “population” of 2.1 billion (daily active isers)
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.
Perhaps not physically, but having influence over 2 billion minds grants a lot of power should you want to use it. All political action starts with an idea.
But high currency allows huge discounts on purchases. If there is a race to the bottom those with high currency will own the world and can finance it through debt.
The alternative is that all matters of security become political.
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."
We need more financial freedom in the west. Facebook is right to allow its users the ability to protect their assets with Libra - backed by a basket of currencies. I'm very excited about this idea; of course Governments are not going to be comfortable with something they can not control. Whey they go to the printing press to pay for their deficits I certainly want the ability to protect my assets with a stronger currency.
Not sure to be more comfortable to rely more on the interests of a private US company that has already been proven un-ethical several times than to trust an elected (so revokable) governement ;-)
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 would rephrase this to say, in America we have less trust in government and more trust in the individual. The distinction is this: No one is forcing anyone to use Libra its your choice. : )
> No one is forcing anyone to use Libra its your choice.
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.
Nothing indicates that Facebook would have a better track record in controlling monetary policy (which is admittedly pretty hard), and at least central banks are under clear regulations and guidelines.
Furthermore, Libra would have incentive to move the policy towards further profit for the members, while central banks have incentives to stabilize the economy.
> I would rephrase this to say, in America we have less trust in government and more trust in the individual.
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.
At this point my opinion of Facebook is so low that I'd rather trust the incompetent monetary policy of governments than the competent but positively evil policy of Facebook.
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.
I don't like facebook either, I don't use it but I do like this idea. Libra is an innovation. A cryptocurrency backed by currencies (and credit markets) is very exciting.
It is an interesting idea, but we cannot look at it in vacuum. Does the value of an idea transcend the context in which it is born and where it is executed? Perhaps, but Facebook has shown time and time again that it cannot be trusted to do the right thing, it will systematically choose profit. Sometimes those two align, but this is not a foundation to build the future of our society on.
So, if "they" decide to do something with their currency, "you" would like to be able to opt out. So you position your interests outside theirs (correct me if I'm wrong). Fair enough, it's certainly your right.
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?
Well, I do respect that, and being in favour of innovation is certainly desirable in many contexts.
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 feel its most Facebook and BigTech that are facing scrutiny, It is targeted and justified but they are not entrepreneurs.
They are now large institutions,and should face scrutiny.
> Providing for security is also inherent to sovereignty of nations
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.
>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.”
AH the bit about the goal being to make payments fast makes a ton of sense. The rest of the world has left the US in the dust with extremely fast payments systems. In India, the UPI system has taken the country by storm with direct,instant bank-to-bank money transfers which take seconds to complete and have no fees attached for the consumer
Historically most banks have charged $1-$2 for an e-transfer (often with a limited number of free transfers per month, or a different type of chequing account one can sign up for to get free transfers), though it seems prices have been dropping in the past few years. Apparently the Bank of Montreal removed e-transfer fees on personal accounts a year or two ago.
So there's definitely still overhead that can make small transfers infeasible, but it's getting better.
CIBC has done the same. TD charges only $0.50 on the most basic plan and it is free on other plans. Simplii (née PC Financial) has always had free Interac e-Transfers. Interac fees have vanished or are vanishing for most people. The daily and weekly maximums are still an issue though ($3k and $10k at most banks usually).
Sweden have a thing called Swish which has instant transfer to anyone who you the mobile phone number of. End users have no fees when using the system to transfer to each others. Businesses that use it pay some though.
For domestic bank-to-bank payments, China has CNAPS https://www.bis.org/cpmi/publ/d105_cn.pdf [PDF] - the paper (2012) could be updated especially in regard to foreign currency.
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).
Nor is PayPal obliged to pay into deposit protection funds as EU banks are AFAIK. I think PayPal needs to start worrying about their standing in EU and becoming a collateral damage when France and Germany are on a roll to make a case for exercising currency sovereignty.
There is a function called "instant transfer" in my Raiffeisen ELBA app, it seems to be free and fast. (In Austria). However, I do not know how other banks handle thism
US banks created Zelle, with free instant transfers via your banking app. It’s a shame more people don’t use it. Otherwise people just use credit cards for paying for stuff.
Zelle is only for P2P payments, and was not initially available at every bank. Additionally, some banks market it differently. Not everyone knows the service they are using is Zelle.
Venmo is bank to bank transfer, which you can do with no fees it’s just a pain in the ass to log in to the bank and enter your recipients routing numbers.
Venmo could be obsoleted just by the banks having a better UX, which I gather everywhere but America already has for sending money domestically
At least in Spain there are some bank-sponsored apps (e.g. Bizum) that can be used to send money to people using their phone number as ID (if they have also an account in the system), and it's instantaneous. I think other European countries have similar systems.
I think this action is a symptom of a much larger, and much more serious disease, namely the fall in trust for traditional fiat currencies like the euro and the dollar. Decades of irresponsible monetary policy and runaway inflation (CPI does not capture the whole picture, look at asset prices the past decade) since the abolishment of the gold standard has lead the general public to indirectly feel disenfranchised with the current monetary regime and I truly believe that we will see more of this kind of action in the future as fiat currencies continue to lose value and eventually collapse due to the extraordinary injection of money that most western central banks have been pursuing in the past couple of years.
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.
I think this is a great example of the power of local authority. If there were a single set of (literally) global rules, then global-scale companies could roll out dubious innovations easily.
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.
It was ambitious, yes. It was also blatantly obvious at the point of inception of the idea itself that government would become a problem. They exist for the exact purpose (among other purposes) to prevent this exact idea from working (at least unregulated and without a proper banking license). All of the recent history and the laws made this obvious. It is truly astonishing that Facebook haven't thought about this before, or were naive enough to think that they could just do this because they were so big.
Once it becomes the currency that all the kids use for black market transactions (e.g. selling used items in facebook marketplace) it will be as hard to stop as trying to ban transactions denominated in US dollars instead of Euros.
Let's be honest, just because something is ambitious doesn't mean it's good for the world. Facebook has tremendous impact on the world already, and events like the Cambridge Analytica scandal have demonstrated that Facebook can't manage its own empire.
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.
> 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.
I don't. They couldn't even manage and maintain an internal currency, why is this suddenly a better idea 6 years down the road, done on an ambitious scale that threatens real currencies? It's a company, there will be other companies with ambitious efforts.
IMO it should really come down to every company has a limited number of ambitious things they should be able to get away with. If a company wants to branch out into new markets, that should be done through a spin-off.
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.
Unfortunately cryptocurrencies are all about buzz, buzz is valuation and adoption. Such as crypto showman Justin Sun, he will seize on any oppotunity to get as much eyeballs as possible.
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.
This situation is a consequence of squandering the company's goodwill. All the big social media companies spent years arrogantly declaring that they --- not the people, not governments, but people in quirky SFBA meeting rooms --- get to decide what you people see, what they don't see, what's true, what's false, what's offensive, what's anodyne, what's legitimate activism and what's dastardly propaganda.
As it turns out, this "we know best" stance ticks off a lot of people, some of whom run states.
but this is exactly what is happening to people not from the US.
People in SF board rooms deciding what is in our news feeds, and now the same company is arrogantly declaring it wants to play with currency too.
Not really. Over the long run almost all govts of any significance will do bad things. You limit the effects of these bad govts with proactively by restricting their powers at all times. This is why you shouldn't give more power to a govt because it's doing well in the 10 year window. Facebook's reach is limited by being on fb.
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.
They say:
> “no private entity can claim monetary power, which is inherent to the sovereignty of nations”
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.
In the late 1800s the Democratic party under William Jennings Bryan was campaigning for bimetallism, which would cause inflation, in order to help farmers because inflation would make their debts less significant. This is one case of people wanting inflation.
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.
Facebook can also rig the economy, even more probable because it is a for-profit business. And if current state monetary powers are quite unaccountable already, imagine when the monetary power is a foreign company.
You're arguing for real cryptocurrencies, not for Libra. Libra can, and most likely will, suffer from the exact same money printing problem you're arguing against.
As a European I'm very happy about this decision. I'm not against Cryptocurrencies but Libra is an attempt by some of the most corrupt and unethical entities in the world (Facebook,...) to control financial flows.
I think the trend of demonopolizing currencies is unstoppable, just take time. I argue that this can be part of a new cold war dimension between countries and when some countries block financial initiatives others fund an opportunity. I wrote a little bit more about this vision in [1].
Perhaps a cryptocurrency is unstoppable, but Libra is the same as Visa. Banning Libra is like banning a company like Visa, it's not anything like banning Bitcoin which would be very hard indeed.
> 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.
Nothing is unstoppable, nation states have militaries and intelligence services. Both can be very persuasive. Facebook is paying close to no taxes in the EU, so noone here has anything to lose from them simply disappearing.
Even following your reasoning, I repeat the same: states/federations like US, China, Russia, and EU could find a new way to compete and handle power, so we are talking about countries with a military and intelligence balance.
I can't believe it either, but for a different reason. If Facebook had announced that they're going to launch their own version of Paypal, nobody would have wanted to use it for privacy concerns. But because cryptocurrency is trendy and supposed to have a positive effect on privacy and not supposed to be controlled by a single party, all of those concerns fall away. Except that (Wikipedia):
> 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.
Why not? Unlike governments, private companies can't coerce me to use their currency. If I think their currency is garbage, I'm totally free to not use it and to convert any Libra I receive into USD. That's not at all true for government-issued currencies. For example: If I try to pay my taxes with anything other than USD, men with guns will come to my home and put me in a cage.
I think Libra is a fine digital currency. It explores semi-centralized/semi-decentralized category. The main problem with Libra is its timing. It's too early. I don't think the market is ready for it.
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.
What other times in history have private corporations taken on government entities and succeeded? Have any of these attempts been on this scale and against an entity of this power (i.e. proposing a new monetary policy against the US Federal Reserve)?
What time period? In the US? In communist countries? I would imagine what you said has been the case in many time periods in many different countries, but I am sure there are other scenarios. Do you have anything specific in mind?
I would argue that Libra is competing directly with the US dollar.
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.
Still this is very much hypothetical. I don't see the point is worry about it now when it's odds of success are completely unpredictable and so far it's got nothing but critique and scepticism from the early adopter crowd.
True. During the Libra hearing, one of the senators basically turned to his peers and said (paraphrasing) "Why are we worrying about this now? We have a million other issues of much greater importance to worry about."
Can someone familiar with Libra speculate how a ban can be implemented? What comes to my mind is forbidding Facebook selling and processing it for EU users but beyond that, I am not sure how a "black market" could be prevented.
Very simple. Facebook is a company. You can legislate laws that determine what companies are allowed to do and what they are not allowed to do.
Particularly if it concerns financial instruments.
How do you stop people obtaining it and using it through their buddies on the internet? Is libra tied to an account like game money? AFAIK it's a cryptocurrency? Haven't looked at the details but cryptocurrency implies it stays on some distributed ladger and no 3rd parties have control over the transactions. Isn't that the case?
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.
Using Libra is morally questionable as you're giving away currency and economy control to a bunch of private entities motivated by profit and accountable to no one.
>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
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.
I fail to see relevancy here. If a physical good is made illegal to own and trade most people can not do anything about it. You'd have to smuggle the goods out of the country or find someone who is willing to take that risk. Most people simply do not have resources to do this.
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.
>If murder is immoral, what are death penalty and soldiers killing other soldiers (when it's not civilians)?
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.
Many, probably most people would argue that the death penalty is immoral. Similarly, soldiers killing soldiers is generally seen as immoral unless it happens as part of a genuine war of defense. On both accounts you can twist the numbers using framing, but there's really no inconsistency here.
It's Facebook. If we were talking about a privacy-conscious system, maybe, but it's guaranteed to be the opposite. Facebook wouldn't do something like this without tying it to the user's FB account.
If Libra becomes a thing, I would guess people will start selling things with it and Europeans will sell their services with Libra if Americans ell their services with Libra.
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.
I'm one of these European users. An American shop only offering payments via Libra would end up the same fate as American shops that don't offer PayPal or another convenient payment method do right now. Why would I even remotely want this? These crypto threads make it out like it's the second coming, we have a more or less functioning financial system and even if it's broken I would not trust Facebook of all companies to offer up a better, global, alternative.
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.
I would imagine machines doing the transactions. For example, a market for game characters where you buy and sell characters where the systems automatically keep tabs and handle the transactions without the friction of large bureaucratic institutions like banks.
Just require people to provide a valid ID to Facebook in order to use it. Shouldn't be too hard to enfore, at least in the EU your phone number is tied to your passport.
>at least in the EU your phone number is tied to your passport
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.
You tell Facebook that if a French national is offered Libra you will fine them. If they complain they don't have the tech to prevent that. You fine them anyway.
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.
French citizen (even with French addresses) are not prohibited to do things which would be illegal in France but legal where they currently reside. So KYC is utterly useless in this case.
why would people want to use libra? Especially if the currency is declared illegal to use inside the EU/Eurozone.
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).
> Haven't looked at the details but cryptocurrency implies it stays on some distributed ladger and no 3rd parties have control over the transactions. Isn't that the case?
Not quite, in the case of Libra. Only a handful of companies control the nodes. Which makes it relatively easy to enforce a ban.
That's completely false. Today, you don't need to interact with the NYSE to buy stock listed in the NYSE. There is plenty on intermediaries providing the service for a fee.
If the half dozen nodes are required to block payments originating from a nation, then it would require illegal middlemen to accomplish that, and they can continually be shut down.
Same as banks have to inform tax or money laundering authorities when certain types of transactions take place, you require any French bank to notify the currency crime unit of a transaction from a known Libra exchange. Maybe you fine the bank for accepting the transaction without proof it was a legal cryptocurrency.
AFAIK, the Libra design is very centralized (which follows from the throughput requirements). All usage of it would be through Facebook's servers. So that would be where you can implement any censorship.
I'm sure that they keep spare guillotines around but I'm not sure that it would be a popular thing to punish random Louis libra user for his few hundres Euro transaction when Facebook is paying less in taxes than him, figuratively speaking.
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.
Stealing a chicken is very different from using something. Stealing chicken is no doubt immoral for most people but punishing the usage of something that Americans can use will not fly unless the USA becomes the arch-enemy and using Libra is perceived as treason and way or unfair enrichment.
Stealing a chicken has a clearly defined victim and stealing, not even piracy or patent infringement is well understood and universally condemned action.
> Haven't looked at the details but cryptocurrency implies it stays on some distributed ladger and no 3rd parties have control over the transactions. Isn't that the case?
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.
> "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.
That method does not work very well for e.g. weed.
Facebook can't prevent people from using it via fake profiles, etc. that have the intent to bypass things. Unless we want Facebook profiles to always be official profiles (validated via government ID) - which the government would like.
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.
Unless a full economy develops under Libra, people will want to convert their Libra to Euros. So you ban the exchanges from operating in your country and force banks to reject any transfers from them. Make using Libra hard enough that most potential users are discouraged, and with low adoption the currency becomes useless.
> 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.
France and Germany are not "the Euro" and IIRC can't decide on their own on EU monetary policies. If they were, we wouldn't be far from the colonial era.
Libra is run by a small group of nodes that have to pay $10 million dollars to get into the consortium. You just fine those companies and seize their assets until they shut down the network or obey the regulations.
It's not illegal for a company operating in country X to own assert in country Y which would otherwise be illegal in company X. At worst, company X move its headquarter, delegate ownership to a subsidiary, etc.
Essentially, the financial network would not allow digital payments out of anything suspected of being a Libra -> local currency exchange, and running any sort of exchange would likely be verboten.
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.
If Libra <=> Euro conversions are made illegal and fined, Libra won't be an option for the usual Facebook user. There might be a "black market" but the few people that would go through a black market are probably not the target audience of the currency.
I'm not sure France and Germany fully get what they are trying to ban exactly. Most politicians only have a very rudimentary understanding of this stuff and probably lots of misconceptions.
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.
> without also impacting a lot of other companies and people doing similar things because the law should apply equally to all.
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.
Maybe but I'm just making the point that Facebook has plenty of ways to use most or all of what they announced regarding Libra to basically meet their stated goal of providing a wallet feature to users that would basically amount to them doing very similar/identical things as other companies already do and would be quite hard to ban for that same reason. The reason I bring up payment solutions is because that is literally the primary usecase for Libra. A wallet type feature with some sort of blockchain based euro or dollar tokens should be completely fine under existing laws. Several companies do that already in the EU.
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.).
Of course FB has ways to use most of what they announced with Libra and most of that would be fine. The problem with Libra is its core, the fact that it's an alternative currency backed by a company that can reach almost everybody. Other companies develop other coins but they do not have the influence FB has and so it gives legislators time to regulate it.
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.
This sounds suspiciously like the “we are too smart for you to regulate us” argument.
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.
Facebook is creating a technical platform very similar to other platforms already in use that enables many things; most of which are neither new nor illegal.
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.
nations also used to be convinced it is inherent to their sovereignty to tell us who to worship and who to marry. this is no longer the case.
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.
> nations also used to be convinced it is inherent to their sovereignty to tell us who to worship and who to marry. this is no longer the case.
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
> 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?
Federal public officials in the US can swear on anything they want to, the Bible is not a requirement.
but why should it be up to a company like facebook? What inherent right does facebook have to create a currency. The only reason it is able to do so in the first place is because of the legal framework and protections that exist thanks to the nations it does bussiness with.
What do they mean to "block Libra"?
To block merchants using it?
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).
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)
I will show this comment to my grand kids one day - Do whatever you can, think whatever you like - By the end of this decade, we will have at least half a dozen such currencies with a couple of them in active circulation. Whether Facebook succeeds or fails - they have covered so much ground in pushing existing establishment on value of an universal currency, offered by firms that provide services directly to customers - that it now becomes hard to ignore.
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.
There is a relatively low understanding among the public of how money is created and how the economy expands in today's modern economy after 1971 Gold standard deviation.
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.
One key difference between a government issued currency and a distributed cryptocurrency is that the former is based on a promise and the latter is based on trust.
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.
Exactly. If a substantial amount of people stop trusting the "promissory state money", then the inflation will be uncontrollable (or not controllable by the state) and the state won't be able to give anything in return of their promissory notes.
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 find how Facebook continues to actually push for Libra astounding.
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.
Problem solved, use USDC. Not invented here but what did you really have to add anyway? A non-sovereign unit-of-account was just a bad idea for consumer adoption anyway. We still have issues with financial literacy here, why not seek simplicity? I'll tell you why not, because it doesn't satisfy someone's career advancement metrics forced on them by a misguided peer-review/stack-ranking system. What other justification was there to use Libra in lieu of anything else?
Libra is backed by real world assets, to try and prevent wild fluctuations! Having it backed by real world assets make no sense! Defeats the whole purpose of crypto!
"no private entity can claim monetary power, which is inherent to the sovereignty of nations" - very bizzare statement. What's "monetary power"? If it's the power to make certain medium of exchange legal tender, Facebook certainly didn't claim that, moreover, by very definition of it such power can not belong to a private entity - a private entity can not force German government to accept taxes in Libra, for example. The power to set legal tender is inherently governmental power, and there's no need to proclaim this banality as something that isn't obvious by definition.
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?
I think the biggest threat that the US government sees in crypto currencies is the ability of adversarial countries (Russia, Iran, etc) to avoid sanctions. If you want to conduct international financial transactions, you must do it in US dollars, and the US government controls that.
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.
Good. Nobody wants Facebook money. Countries like Germany and France have a better track record being trustworthy than a company like Facebook. Facebook has been proven several times over its very short lifetime to not be trusted.
What if facebook allowed libra holders to hold elections and vote for the leadership of the project? They could build the worlds first virtual state, arguably a very popular and populous one.
Is EUR a threat to souverinity of the nations then? What is the difference between libra and BTC if not the sad state of affairs wrt to btc's usefulness as an everyday currency?
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).
to be honest, I am not entirely sure about the precise definition of permissioned-blockchain-based, assets-backed, electronic currency that is also mostly vaporware at this time. The ownership is also non-linear. So, IMHO France and Germany are banning something that not only does not exist but also not even clearly defined. which feels like either a "fu Zuck" or "we are scared"
As a french, this is exactly what I expect from my government. Libra is a putsch by a (vampiric) private sector entity that want to concentrate powers.
The beginning of the article reads... "In a joint statement, the two governments affirmed that “no private entity can claim monetary power, which is inherent to the sovereignty of nations”. Is this irony in the US that a private entity, the Federal Reserve, is in just such a position of monetary power. It's all smoke and vaping, chickens and eggs, hemp and da kine.
Although the Federal Reserve formally is privately owned, it is a government entity. It was established through a law and is controlled by the Board of Governors, appointed by the US President and approved by the US Senate.
I for one welcome Libra, but only for exactly one purpose.
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. :-)
Pride comes before the fall. Facebook should have spent much of their energy fixing their image first and not tackling anything like Libra. If they need money they need to focus on products that provide real value without intruding on privacy. They need to study how Microsoft turned around their image. It takes time.
I think the last thing anybody wants is a vast perceivable immoral entity such as Facebook, which is involved in so many scandals and should likely be broken up if anti-trust enforcers had any bite left to them, insinuating themselves into a fundamental function such as the issuance of money and the transactions thereof. It’s like a hybrid of The Circle and Mr Robot’s Evil Corp’s eCoin.
Imagine the power of the United States if it controlled the world’s currency through Facebook’s Libra as a reserve currency? Oh wait the U.S. dollar is already the world’s reserve currency and is included in over 50% of the world’s FX transactions. Not much would change.
Does the use of cryptocurrency allow people to evade taxes? Does it allow bad actors to transact dangerous goods? People have good and evil within them. If you give people complete freedom, there will be those who allow evil free reign. Trust but verify./
The problem lies in the unit of account. If Libra becomes one of the global unit of accounts with own money supply outside of other monetary sovereigns reach while still keeping the impact on their economies, then Libra is a direct threat to their economies.
Libra is not all that bad. While there are problems with Facebook gaining yet another source for information that takes advantage of privacy terms, I think a stablecoin by GAFA is in the right direction. It speeds up the adoption of cryptocurrency by a lot.
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?
> If we have a big privacy problem with Libra in the future, we might be able to find a way around it.
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.
Excuse the ignorance... but what do France and Germany specifically fear? That if Libra would become more popular than the mainstream fiat currencies Facebook could have more control over the economy than governments?
Not sure either, it's a legitimate question. A lot of people seem to find it obvious, but to me it seems like there is a lot of subtleties in why something is or isn't a threat. Bitcoin, Paypal, Ethereum, gift cards, and other online payment systems didn't get this reaction, it's just the Facebook-issued credits (which, for the record, isn't really a cryptocurrency, that's just the marketing department).
I thought, whatever is not explicitly banned is allowed. The article is just a fragment, it is not clear if it is just a politician voicing an opinion, or the declaration of policy by the governments.
> I thought: whatever is not explicitly banned is allowed
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.)
California pats itself on the back for passing massive social reform measures while its flagship tech corporations are going to town picking apart people's lives and profiting from them.
That Zuck...is he really trying to turn the crypto community from wanting to abolish banks towards appointing Facebook as the biggest too big to fail bank in history?
What technical distinctions between Libra and cryptocurrencies running on other permissioned blockchains (like Lumens/Stellar) would prompt this type of regulatory response?
I thought it was irresponsible of FB to announce this thing. All over the world the question is not whether or not to regulate Facebook. It is how to do so. So, it strikes me as some kind of supreme arrogance or dishonesty to announce a currency without expecting it to be immediately shut down by governments. How does this pass internal review?
It reminds me of this off shore city facebook wanted to build or something like that.
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.
Thanks, this resonates. But "there are days I wish the internet collapse" made me laugh! After how long will the internet be part of the old world, which the young disrupters wish would burn down so they could build something new instead? Maybe since it existed.
'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.
Wrong thread: this is about Libra, not Bitcoin. Libra is owned by a company and Bitcoin is a cryptocurrency.
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).
Internet giants should not be able to circumvent or manipulate the economy of any country, by creating a currency. It's fucking mad and wrong by design.
I'm surprised at the amount of hate that libra seems to be getting, even on the tech-startup forum of HN. Are we all becoming a bunch of Luddite conservatives? When I look my own life an experiences, I can't really say I feel any of the alleged horrors cast down upon us by big tech. I get that privacy is an issue, but ... it is avoidable. I host my own cloud(nextcloud), use tracking blockers, avoid signups...etc.
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.
Citation needed? Most people I know happily use it to communicate and post funny (or at least trying to be funny) posts, or are older people who post lots of family pictures. 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 know better than those ignorant proles, I wish they'd do what I think is best for them instead of what they want to do."
Since you disagree with the parent and are claiming the opposite as him (also without a citation), I decided to Google around for some actual data.
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.
> 36 percent of adults view Facebook positively, while 33 percent see it negatively. And Twitter’s rating is 24 percent positive, 27 percent negative.
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.
I primarily responded because I disagree with your opinion:
> 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.
>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..).
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.
>hating on Facebook is an excellent excuse for people to feel superior to the general population. "I know better than those ignorant proles, I wish they'd do what I think is best for them instead of what they want to do."
Ironic; that's the same ethos being espoused and implemented by those who run Facebook.
Its inherent in the business model: profiting off making people think, do, and buy things they otherwise would not have. Ever since the news feed ceased to be chronological, FB has become increasingly forceful with their filtering and sorting of people's minds primarily in accordance with what increases FB's profits.
Blocking a communication platform doesn't sound right in a free society. There's nothing inherently wrong with connecting people. On the other hand, there should be heavy regulation and enforcement in place so that users don't get their data unknowingly exploited for commercial interest.
>Blocking a communication platform doesn't sound right in a free society.
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.
Facebook has turned out to be a potential threat to free society. I’m not just talking about the mass manipulation that goes on mostly unregulated, but also the fact that it has quite a lot of personal information on our citizens.
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.
All problems from big tech stem from their centralization.
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.
Since big tech companies seem to have an advantage over smaller ones (otherwise smaller ones would already be dominating the market), presumably they'd just be replaced by large Chinese equivalents, which wouldn't be broken up as they have much more cooperative relationships with their government. TikTok is already quite popular in the west, proving it's possible. Unless the west tries to ban all Chinese social networks, which would require some kind of national firewall, in which case it'd lose any moral high ground it had over China for China's banning of WhatsApp, Facebook and Twitter.
Amazon - See data hoarder [1]. Other than that, debatable because Amazon organizationally seems to optimize for efficiency (e.g. compressing margins). However, by cracking it into a logistics company and an online retail company, users would benefit from broader access to Amazon's efficient supply chain. Furthermore, the incentive for Amazon to abuse its logistics advantage to muscle out competition (e.g. Amazon Basics + first-party product offerings) would be lessened.
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.
Don't know about friendship, but there's certainly a point of contention in that the US has allowed breeding the monopolies we have, without any action whatsoever by US antitrust enforcement (eg Fb/Whatsapp and Google/DoubleClick acquisition). It stands to reason that the EU must take action here in order to protect the common market. Another upcoming conflict is EU's underfinanced banks becoming easy targets after years of Draghi zero-interest ECB policies.
I think you should make all major publishers responsible for the content they present, and we actually do for news papers in Denmark. It's illegal for them to lie, and their editorial staff is held responsible. It's a little more complicated than that one line of course, and it's governened by an independent free speech party.
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.
Facebook is an addictive social reinforcement casino first, communication platform second. Though I don't disagree with you. I think banning it is too far.
There are different ways to connect people. I'm don't think the way facebook drives engagement does it's a net plus for society.
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.
Is that a bad thing? Regardless of the fraction, if something really does cause more harm than benefit, we will by definition be better off without it, no?
If something causes more harm than good, then we would be better off in a hypothetical world where it was magically erased from existence. In the real world, the negative effects of trying to forcibly ban it can easily be worse. See: drugs.
They also don't account for the fact that Facebook usage is correlated with screen usage, which is correlated with happiness, so the effect they measured could just be the effect of screen use.
"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...
Why not Google then, too? Corporation of evil and all that. Or, right, it is too big to fail and it's privacy destroying applications are so useful and nice...
Dumbest move ever by Facebook to preanounce and give governments time to complain. They should have moved fast and dealt with the consequences later. They had a reasonable chance of being the dominant cryptocurrency, and instead they get to spend a year apologizing and backtracking before they ever deploy.
Even if FB were willing to take the risk, they partnered with institutions that understand the world a bit better than that.
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.)
There is no “working with government”, for any proposed money substitute that gives normal people a place to hide from central bank inflationary policies.
That would just never happen. The French government doesn’t have some minor worries that can be resolved by changing an API. They are going to oppose anything that is cryptocurrency plus Facebook.
I'm surprised people disagree with this statement since blitzscaling seemed pivotal to Uber's growth. However, FB is already in hot water. Maybe the pre-announcement was to prevent further damage to the brand.
Had they done this, they might have risked a full on ban on any monetization in those nations. The blue app has negative growth in those markets, and no surplus of goodwill.
They claim to provide jobs, like any business. As for Libra, it's close to competition with "money," and they are restraining Libra from competing in the money business that the two countries are engaged in.
Think this is less about liberalism (it doesn't argue for government to be run like a business) and more about US-inspired thinking where businesses are better than governments.
This isn’t as insightful as you think. You’re tautologically describing the notion of sovereignty. Sovereignty is supreme power. Of course it abhors “competition.”
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!