Facebook's 'Libra'

Discussion in 'Digital Currencies' started by Roswell Crash Survivor, Jun 19, 2019.

  1. Roswell Crash Survivor

    Roswell Crash Survivor Well-Known Member Silver Stacker

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    The Economist: Facebook wants to create a worldwide digital currency

    Not a Cryptocurrency, just a digital currency transfer platform running off the back of FB's partners.

    I can foresee at least 100+ thorny issues and know that thousands more do exist.

    FB will stick to its core business of mining data on personal relationships to sell intrusive ads; like selling you ads on STI testing when it knows your 'action on the side' is messaging and meeting six other men every week.

    You can bet your last ounce of silver that law enforcement agencies will make a big dog and pony show about how this is 'enabling money laundering and terrorism financing'.
     
  2. willrocks

    willrocks Well-Known Member Silver Stacker

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    Zucker Bucks
     
    Phiber and mmm....shiney! like this.
  3. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

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    FB can launch labra first in Singapore since practically everyone is using Whatsapp. Singapore's looking for a wechat like mobile payment solution and so far no one, including the main dbs bank seems able to make one that works.
     
    Last edited: Jun 19, 2019
  4. willrocks

    willrocks Well-Known Member Silver Stacker

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    Someone has identified the major code flaws in the Libra codebase:

    https://github.com/libra/libra/pull/83

     
  5. Oddjob

    Oddjob Well-Known Member Silver Stacker

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    upload_2019-6-21_15-31-18.jpeg
    Damn they found it.
     
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  6. trew

    trew Active Member Silver Stacker

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    RIP thousands of crap coins
     
  7. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

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    You can see that they are publicising Libra even before it is ready. Zucker bucks is pushing central banks to come up with regulation on cryptos so he could mold Libra to work around the regulations.
     
  8. Shaddam IV

    Shaddam IV Well-Known Member Silver Stacker

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    Battery Hen Bucks.

    I wonder how many people will jump into the volcano clutching their Alexas and Echos and Home Pods dreaming about their wonderful Connected Lives?
     
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  9. JOHNLGALT

    JOHNLGALT Well-Known Member

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    Who would want to buy Sanitary Pads from SUCKERBERG? There must be a better option for men than Girlie Pads.
    LIBRA IMAGE.JPG
     
  10. Oddjob

    Oddjob Well-Known Member Silver Stacker

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    Opinion piece today in the SMH re Libra.

    https://www.smh.com.au/business/ban...ebook-s-digital-currency-20190702-p523an.html

    Note: Extract from the article: " That would essentially mean that it – a self-governing club of private companies - had created its own central bank and fiat currency and the ability to create credit which would be disruptive, not just for banks, but for central banks and governments.



    Why governments need to kill Facebook's digital currency
    [​IMG]
    Stephen Bartholomeusz
    Senior business columnist
    At the G20 meeting in Japan last weekend, national leaders were handed a letter from the Financial Stability Board (FSB) which contained a very timely message.

    Among the key issues that the FSB chairman Randal Quarles highlighted in his letter, was the need to harness the benefits of financial innovation and technology while containing the risks.

    [​IMG]
    Facebook's Mark Zuckerberg. His Libra cryptocurrency poses a threat to global competition and financial stability.Credit:AP

    He specifically referenced the use of "crypto-assets" for retail payment purposes and said their wider use would warrant close scrutiny to ensure that they are subjected to high standards of regulation.

    The letter was timely, of course, because earlier last month Facebook, supported by 27 corporate partners, foreshadowed the launch of a new cryptocurrency, one with global ambitions that Facebook’s 2.4 billion user base could help realise.

    While Facebook envisages launching the new digital currency in the first half of next year, the initial response of regulators and politicians suggests that might be too optimistic.

    The idea of an unregulated global payments system owned and directed by a bunch of for-profit companies led by Facebook issuing its own currency is, at the very least, disconcerting.

    If Facebook could establish the currency, Libra, as a global medium of exchange, however, its potential to disrupt and circumvent, not just banking systems but central banks and their governments, would represent something far more threatening.

    The Bank for International Settlements said last weekend that cryptocurrencies issued by the big tech companies could rapidly establish a dominant position in global finance and pose a threat to competition and stability.

    Unlike other cryptocurrencies, which have no intrinsic value and are therefore volatile, Libra would be backed by a basket of securities in a range of fiat currencies. As individuals buy Libra the Facebook consortium will acquire a matching amount of securities, reversing that process when Libras are being redeemed.

    That means the value of Libras will be relatively stable, although because they will be backed by assets denominated in a small number of major currencies, they might fluctuate significantly relatively to individual fiat currencies.

    Facebook plans to launch a cryptocurrency called Libra next year as part of its wider efforts to expand beyond social networking into e-commerce and global payments.

    Initially, at least, Facebook is presenting Libra as an unregulated or "shadow" payment system that would be more efficient and timely than the fragmented range of existing payments platforms.

    Those platforms are fragmented, and less efficient than perhaps they could be, because they are regulated at a nation-state level and their core participants are intensely-regulated financial institutions, with prudential requirements and other costly imposts like compliance with anti-money laundering, consumer protection and privacy laws.

    Facebook’s Libra could materially reduce the friction costs of payments, particularly cross-border transactions, if it could avoid those expensive webs of regulation.

    Given that the earnings on the assets that will back the issuance of Libra will, unlike the interest on bank deposits, ultimately flow to Facebook and its partners that regulatory arbitrage – the arbitrage between regulation and no regulation, or even just less regulation – could be highly profitable.

    Facebook says it is initially targeting the 1.7 billion people who don’t have access to banking services, largely in developing economies. Its ambitions, however, aren't confined to the developing world.

    It didn’t take long for analysts to conclude that, if Facebook were successful in driving acceptance of Libra in countries with central banks unable to defend the value of their currencies, its consortium could effectively drive monetary and fiscal policies in those economies.

    It’s also isn’t a great stretch to envisage that at some point in future, if Libra becomes a popular medium for exchange, that Libra’s Swiss-based Libra Association might decide to offer more financial services and, in particular, might decide to offer credit.

    That would essentially mean that it – a self-governing club of private companies - had created its own central bank and fiat currency and the ability to create credit which would be disruptive, not just for banks, but for central banks and governments.

    [​IMG]
    Financial Stability Board chair Randal Quarles.Credit:Bloomberg

    There are those who think that prospect is risible but Facebook and the other tech giants have demonstrated their ability to exploit their economies of scale and network effects to create dominant global ecosystems with vast user numbers.

    Financial information is essentially just data and Facebook and its partners should be able to grow Libra’s user base and exploit both its data and that within their existing networks for profit, if they are left to do so as loosely checked and regulated as big tech companies like Facebook and Google are today.

    Even if it were to remain just a payments system, fully backing the Libras in circulation with the fiat currencies in its reserve, the decisions it made about which currencies and assets to buy would have the ability to move bond markets and currencies.

    The notion that the Libra Association, an unregulated oligopoly led by Facebook, could become a global shadow bank or even a de facto global central bank is more than disconcerting.

    That is why governments and central banks should do whatever it takes to try to ensure that Libra is regulated stringently enough to limit any systemic implications – or kill it off before it has the opportunity to develop them.
     
  11. Shaddam IV

    Shaddam IV Well-Known Member Silver Stacker

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    I guess if there are people dumb enough to put an Alexa or Apple home pod thing in their house then there are people dumb enough to use a Facebook currency.

    “But it’s just sooooo convenient” Says the grazing animal.
     
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  12. willrocks

    willrocks Well-Known Member Silver Stacker

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    There's way too much doublespeak in that article.

     
  13. willrocks

    willrocks Well-Known Member Silver Stacker

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    Members of the US Congress sent the following letter to Facebook regarding Libra:

    https://twitter.com/APompliano/status/1146208346543804418?s=20

     
  14. Ipv6Ready

    Ipv6Ready Well-Known Member Silver Stacker

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    If US government successfully bans Libra than bitcoin US ban won’t be far off.
     
  15. willrocks

    willrocks Well-Known Member Silver Stacker

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    Don't hold your breath. Facebook has offices they can target. Bitcoin doesn't.
     
  16. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

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    Not possible to ban something that doesn’t even exist. I think mark suckerbeg wants to make use of the congress to curb bitcoin and other cryptos while he will redesign Libra to work within the newly defined legal constraints.
     
  17. Ipv6Ready

    Ipv6Ready Well-Known Member Silver Stacker

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    US banning bitcoin doesn’t mean it will disappear. It just won’t be readily for the public in USA and US banking system.
    Just like drugs are banned in USA but it doesn’t mean you can’t get it.
     
  18. willrocks

    willrocks Well-Known Member Silver Stacker

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    If they were going to go down that route they would have done it by now. I suspect the US government have an agenda to permit crypto and even encourage it. It helps them (and the world) move into a completely cashless society.
     
  19. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

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    Cryptos will be regulated eventually. Bitcoin will have to evolve to survive.

    If cryptos are regulated, silver will breakout. gold is in a different league. My gold is for hedging against inflation. My silver is to make real money.
     
  20. willrocks

    willrocks Well-Known Member Silver Stacker

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    Cryptos are already heavily regulated at the exchange level, and all transactions are public.

    So you're saying Silver will breakout because people who don't want crypo regulation will move into the PM market? Wouldn't the government then also regulate physical PM markets too? Making PM's either illegal, or highly regulated.

    There's no way to escape the coming cashless world and negative interest rates. Any way to circumvent negative interest rates will be eliminated or taxed to death.
     
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