
France and Germany Agree to Block Facebook's Libra - huntermeyer
https://www.reuters.com/article/us-facebook-cryptocurrency-france-german/france-and-germany-agree-to-block-facebooks-libra-idUSKCN1VY1XU
======
blackbrokkoli
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!

~~~
lacker
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.

~~~
burlesona
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.

~~~
downandout
_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.

~~~
TuringNYC
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.

~~~
dantheman
Can you point me to a 'modern war' without armies? I'm interested in what you
actually think a war is?

~~~
ismail
Not op but will take a stab. The comment was in response to:

“This is hyperbole at best. Facebook does not have an army”

Op was pointing out that power != war with guns

“Facebook is the most powerful private entity on the earth right now”

The comment was how power could be achieved via other methods of warfare-
including the ability to shape conversations.

Another word for this would be competition. He has a point.

~~~
denton-scratch
Negative, Spock.

The ability to shape conversations or to compete is not the same as making war
(or you are relying on an idiosyncratic definition of "war").

~~~
ismail
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.

References:

[https://www.merriam-webster.com/dictionary/war](https://www.merriam-
webster.com/dictionary/war)

[https://www.dictionary.com/browse/war](https://www.dictionary.com/browse/war)

------
aazaa
> “no private entity can claim monetary power, which is inherent to the
> sovereignty of nations”

What a bizarre statement. Providing for security is also inherent to
sovereignty of nations, but private security firms flourish.

It's also odd in the context of Germany in particular where a private currency
has been used for many years:

[https://en.wikipedia.org/wiki/Chiemgauer](https://en.wikipedia.org/wiki/Chiemgauer)

I suspect there's a lot more behind this statement than meets the eye:

Inflation, and the ability of the state to force it upon its citizenry by
forbidding the use private money - has come to be viewed as inherent to the
sovereignty of nations. The world's governments are now entering a new phase
in which none can afford to hold the more valuable currency due to the damage
caused to export business. Net importers like the US have been holdouts, but
even it too will have to bow to reality.

This conflict means that, no matter how well intentioned, policy makers will
be feel compelled to devalue their own currencies. It's a race to the bottom,
but without a bottom. Alternatives, especially private alternatives readily
available to citizens, will increasingly be viewed as the enemy.

~~~
justinzollars
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.

~~~
olivierduval
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

~~~
justinzollars
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. : )

~~~
gjulianm
> 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.

~~~
clarkmoody
> You don't need to use it to suffer negative consequences due to a private
> foreign for-profit business controlling monetary policy.

And the track record of public, non-profit entities controlling monetary
policy is ... great?

~~~
gjulianm
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.

------
TazeTSchnitzel
Best thing I've read on Libra:
[https://foreignpolicy.com/2019/06/24/971554-facebook-
bitcoin...](https://foreignpolicy.com/2019/06/24/971554-facebook-bitcoin-
libra-crypto-bad/)

~~~
aniforprez
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

~~~
Avamander
Europe has SEPA (Instant). The Chinese have WeChat Pay and similar? I'm
curious, what other solutions other countries have?

~~~
pantalaimon
Most banks will charge you extra for the _instant_ payment. It's pretty
ridiculous.

~~~
jacquesm
You're a couple of decades behind the times as far as the EU is concerned.

------
Qasaur
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.

~~~
jayd16
I think you're right about the general unrest but frustratingly we see snake
oil bubble to the top.

A new gold standard with rent seekers won't save us from stagnant wage growth.

~~~
dmix
I've never heard anyone say anything nice about Libra. Most likely Libra with
be DOA, regardless of this move.

I don't even know why so many people are wasting their time on this stuff.
Does the German/French gov not have other more pressing issues?

No need to fantasize about the risks of private mega-corp currencies taking on
the monetarists even before it has made any realistic challenge to it.

------
dannyr
I dislike Facebook but I kind of feel sorry for them now because any ambitious
thing that they'll attempt will probably be blocked by governments now.

Facebook and Zuckerberg deserves it though.

~~~
WanderPanda
They probably should have started it without that huge buzz and in a couple of
selected countries.

~~~
AFascistWorld
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.

------
HashThis
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.

Printing money hurts workers.

~~~
twblalock
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.

------
rainyMammoth
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 can only hope other countries will follow soon.

~~~
Thaumatorium
It's a _centralized_ cryptocurrency. That is where the problem is. It's (IMO)
not even the corruption of Facebook et al. which is the problem.

------
grezql
I wish they just blocked facebook altogether.

It has caused people more pain than good

~~~
noisem4ker
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.

~~~
moksly
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.

~~~
ethbro
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.

~~~
dontblink
This is a trope that has little basis in fact. Please explain concretely why
breaking each of those companies would be better.

~~~
ethbro
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.

------
wslh
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].

[1] [https://blog.coinfabrik.com/libra-association-a-menace-
and-a...](https://blog.coinfabrik.com/libra-association-a-menace-and-an-
opportunity-for-blockchain-ecosystems/)

~~~
lucb1e
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.

~~~
igammarays
> “banning Bitcoin would be very hard indeed”

It’s hard to take crypto enthusiasts seriously because of delusions like this.

Banning bitcoin would be trivial: no legitimate business would accept it,
making it useless except to fringe outlaws.

~~~
kabacha
Eh almost no legitimate businesses accept bitcoin right now and yet there it
is.

------
journalctl
Private tech companies should not be issuing currency. I can’t believe we have
to have this conversation.

~~~
lucb1e
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.

------
dnprock
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.

[https://bitflate.org/post/2019/08/26/bitcoin-missing-link-
to...](https://bitflate.org/post/2019/08/26/bitcoin-missing-link-to-the-
world.html)

------
shanecoin
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)?

~~~
buboard
Private entities attempting this would always have been shut down with
violence. The prevailing violence established itself as "the state".

~~~
shanecoin
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?

~~~
buboard
the East India company comes to mind

------
mrtksn
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.

~~~
ijonas
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.

A "ban" doesn't need to be technological.

~~~
mrtksn
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?

~~~
freddie_mercury
I'm not sure why you think this is so hard?

You pass a law. Most people don't break the law.

You make it illegal for banks to transfer to known Libra things. You audit
people. You apply big fines.

Murder is illegal but that doesn't mean _nobody can commit murder_.

~~~
nextlevelwizard
Murder is also immoral.

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.

~~~
lapnitnelav
If murder is immoral, what are death penalty and soldiers killing other
soldiers (when it's not civilians)?

Besides the context (and the legal aspect), they are the same act, homicide
with intent. Their morality seem to be different depending who you ask.

And as for Libra being made illegal, I don't see what value it provides in EU
to make it worth breaking the law.

~~~
nextlevelwizard
>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.

------
sergefaguet
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.

~~~
olivierduval
> 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

~~~
en-us
> 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.

------
ciocan42
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).

~~~
lucb1e
> [p2p money may be useful for] parts of the world where cash is king and
> unsafe (due to high crime rate).

How is this going to make a difference? Either I steal your wallet or I steal
your... wallet.

------
usr1106
This was a political statement.

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)

------
padiyar83
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.

------
rohan_shah
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.

~~~
doomjunky
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.

[1]
[https://en.wikipedia.org/wiki/Promissory_note](https://en.wikipedia.org/wiki/Promissory_note)

~~~
igammarays
It’s still “trust” in both cases. One must trust the power of the government
making the promise, or rather the global system of governance.

~~~
rohan_shah
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.

~~~
doomjunky
It's not that easy.

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.

------
vidoc
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.

------
mcthrowaway123z
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?

------
xiaodai
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!

------
smsm42
"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?

------
ajhurliman
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.

------
gooseus
This is pretty much exactly what I said the response would be:

[https://news.ycombinator.com/item?id=20252375](https://news.ycombinator.com/item?id=20252375)

Currency and sovereignty are inseparable, have been for all of human
civilization.

------
Y2WATERMARK
With a16z, eBay, Mastercard, Stripe, Visa, Spotify, PayPal, Uber, and many
others, this is not just about Facebook.

[https://libra.org/en-US/partners/](https://libra.org/en-US/partners/)

~~~
lucb1e
I guess that's indeed how Facebook likes it.

------
tripzilch
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.

------
buboard
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.

------
AzzieElbab
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?

~~~
lucb1e
> What is the difference between libra and BTC

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).

~~~
AzzieElbab
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"

~~~
w0de
> fu Zuck > we are scared

In my opinion both completely reasonable reactions to Facebook attempting to
set up a private currency.

------
p0nce
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.

------
Tylereves
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.

~~~
taffer
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.

------
xxxpupugo
> no private entity can claim monetary power, which is inherent to the
> sovereignty of nations

Well said, that should be self-explainable enough.

------
buboard
That's like the best Ad for libra? I think we should investigate whethere
these politicians are being secretly paid by zuck

------
bubble_talk
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. :-)

------
segmondy
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.

~~~
qubex
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.

------
booleandilemma
Countries don’t want a foreign company controlling the currency their citizens
use. Surprise surprise.

------
webninja
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.

------
bawana
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./

------
gringler
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.

------
nijynot
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?

~~~
save_ferris
> 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.

------
pier25
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?

~~~
Qasaur
It's the fear that people may prefer using other currencies than their own,
which collapses the regime of spending through inflation.

~~~
pier25
Thanks, not sure why I'm being downvoted...

~~~
lucb1e
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).

------
billfruit
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.

~~~
lucb1e
> 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.)

------
Future95
Why will they ban such a new wave? I don't agree to their policies.

------
shrimpx
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.

------
jayd16
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?

People seem to be swallowing it, though.

------
mcgwiz
What technical distinctions between Libra and cryptocurrencies running on
other permissioned blockchains (like Lumens/Stellar) would prompt this type of
regulatory response?

------
vagab0nd
This is probably one of the reasons why Satoshi Nakamoto didn't use their real
name - If there's a single entity for governments to target, they will.

------
ridaj
What are they blocking exactly? Does Libra even exist yet or is it vaporware
still? Are they also blocking other crypto currencies?

------
igammarays
I’m wondering if the EU and/or the US would ever release their own government-
backed crypto and ban the use of all others.

------
jorblumesea
Not sure what they were expecting, Libra is a direct threat to the power of
nation states and their fiat currencies.

------
asveikau
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?

------
nsai
what does facebook's libra have to offer that current cryptocurrencies don't
already?

------
jokoon
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.

~~~
dbtc
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.

------
MaupitiBlue
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.

~~~
noname120
Alternatively, they should have worked with governments to make sure to
address their worries before announcing it publicly.

~~~
pjkundert
There is no “working with government”, for any proposed money substitute that
gives normal people a place to hide from central bank inflationary policies.

~~~
gjulianm
Our current capitalist system does not work without inflation.

~~~
pjkundert
Correct. What’s going to be really fun, is when normal people _do_ have
powerful, practical, scalable and unstoppable non-debasable options.

The poor slobs left holding the Fiat waste-paper...

------
paulcarroty
Typical government don't want:

* easy cross-country payments

* non-government money institutions

'Cause money always been the major element of government power.

For typical people, I think, Libra and similar are more positive. If you can
pay someone in Africa from Japan with minimal fees/headache, it's very cool.

~~~
tgv
Until Zuckerberg changes his mind, or something else happens. Then it's back
to bitching about governments failing to protect your rights.

Money is power, as you imply, and I don't want any of it in Zuckerberg's
hands.

------
joshfraser
If it were a real cryptocurrency, that wouldn't be possible.

------
SN76477
Who doesnt want a currency controlled by a private company?

~~~
holler
or better yet, controlled by a conglomerate of Silicon Valley Tech companies.

------
nagaramlakshmi
Libra is a joke. I am glad they blocked it in all honesty

------
zelly
Wait until they find out they can't block Bitcoin.

~~~
lucb1e
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).

------
danielovichdk
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.

------
llcoolv
The great firewall of EU :D

------
arisAlexis
eventually Facebook will need to use something like Ethereum or Bitcoin

------
leegr
I applaud this decision

------
weddpros
If the Internet was invented today, it would probably be banned in Europe too

------
SRTP
Meanwhile, Bitcoin still hasn't returned their calls.

------
tryptophan
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.

------
accounn
AI.

Investors > Intelligence.

Artificial Inflation.

AI.

------
galipgokalp
this is not good

------
gtfratteus
Other than the fact that they have some sort of block chain backend, how is
Libra even different from Venmo?

Seems like they're just banning it because they don't understand it.

------
dmnashir
Anybody have any information what will Indonesian govt do about Libra?

------
zekarlos
is good? is bad? i don't know... :/

------
thefounder
Ok but can we have a digital euro? I don't like facebook coins but
something(digital money) is better than nothing.

~~~
kazen44
we have digital euro's? the fact that it is a physical note or a database
record does not matter for fiscal policy.

ever used a digital system to transfer money? like ideal, bancontact or
giropay or just plain SEPA?

~~~
thefounder
I mean something like digital cash so that I can choose how I spend it and
when I spend it without a bunch of terms & conditions

