
Visa, Mastercard, Others Reconsider Involvement in Facebook's Libra Network - JumpCrisscross
https://www.wsj.com/articles/visa-mastercard-others-reconsider-involvement-in-facebook-s-libra-network-11569967023?mod=rsswn
======
tjpnz
I think we've reached an inflection point where working with Facebook presents
too much of a risk. It feels like all of the issues around privacy, data
security, content moderation, leadership and ultimately Democracy have boiled
over. It makes sense that established financial institutions would want to
distance themselves from that.

~~~
duxup
Not just threats from Facebook doing something wrong and getting dragged into
it with them.

Also ... Facebook has proven it is willing to bully and lie to people doing
business WITH Facebook.

If I'm Visa or Mastercard... do I want to get into this space and at the same
time be at the mercy of Facebook?

If there is some other network / payment system would Facebook be ok with me
getting into that too?

Generally if you read enough stories it is clear there's no consideration
about "Hey should we do this?" at Facebook. It seems more than at most
companies there are simply no rules.

~~~
thenewnewguy
> Also ... Facebook has proven it is willing to bully and lie to people doing
> business WITH Facebook.

Woah, I must be out of the loop - what is this in relation to?

------
ecmascript
Libra feels to me as a step towards big companies trying to break free from
governments. If they control the money supply the long term effect would most
likely be that they have the control of everything.

I think Libra is very frightening and I hope it fails. I have nothing against
decentralized systems, but centralized ones that is controlled by a few
companies is very scary.

I cannot read the article, since it's locked but you can get the gist of it
and if companies are leaving the coalition it's probably for the best.

~~~
short_sells_poo
Doubly so if the controlling entity is something like Facebook, which has
given us zero reasons to trust them.

~~~
krick
I would be glad to take an opportunity to insult facebook again, but actually
I don't like this sentiment at all. It just _happens so_ that facebook is
among the least trustworthy companies at the time, but I wouldn't be more at
ease if they had a good public image and its head would be a baby-kissing
politician making donations left and right. Image is just that, an image, and
if somebody manages to seem "good" for the public, it only makes them more
dangerous and is more of the reason to be worried about them.

Perhaps the only good thing about facebook is the public distrust of it right
now. I hated it much worse when people unironically called Google "the good
company".

------
throaway466744
To counter-balance what I read here: I left Facebook, but I find that Libra is
a positive thing. It gave me a positive image of Facebook. I thought
"Zuckerberg can actually have a positive impact when he decides to".

Personally, I would trust Facebook more than I trust the government, and this
is not a joke. As far as Libra, from a technical perspective there is a
decentralized blockchain (with a credible plan to further decentralize it in
the future), and a well-thought out stability mechanism. From a corporate
structuring perspective, there is the Libra Foundation. I feel people have
really politicized this topic, and most of the anti-Libra sentiment is fueled
by partisan politics and fake news (ie "Facebook will control the worldwide
money supply!!!").

Those saying that the government is good while corporations are evil are very
naive. Governments are more corrupt and dissimulative than any corporation
will ever be. They are a bunch of arrogant people not being personally
accountable for their lies and errors. Zuck has his net worth tied to FB.
Corporations are no angel, but they are accountable, and as such they are more
trustworthy. Moreover, when they screw up, they do not pass a law to force us
to clean up their mess.

Governments are going crazy these days, citizens need to take back control of
the their money, we need to get back our freedom to conduct transactions
freely.

Facebook is in a unique position to pull that one off. It's unfortunate they
totally screwed on the communication front, but hopefully they can fix that.
Personally I am looking forward to the launch.

~~~
benregenspan
> Zuck has his net worth tied to FB. Corporations are no angel, but they are
> accountable, and as such they are more trustworthy.

There is no scenario where Zuckerberg's net worth is reduced to an amount that
one person is capable of spending in a lifetime. In terms of acting as an
accountability mechanism, what is the difference between $100M and $65B?

> Moreover, when they screw up, they do not pass a law to force us to clean up
> their mess.

What was the Emergency Economic Stabilization Act of 2008 about then? And did
the CEOs of any of the banks that were bailed out by TARP end up suffering any
material deprivation as a result?

~~~
DennisP
Don't underestimate what one person can spend. If your reference point is a
billionaire lifestyle with a giant yacht, half a dozen estates on multiple
continents with staff to manage them, and a private jet capable of crossing
oceans to ferry you between them, then with $65B all that is a drop in the
bucket and you've got plenty left to spend on whatever political or
philanthropic causes you wish, and with $100M you actually have to economize.

------
CaptainZapp
_and to save some of the $25 billion “lost by migrants every year through
remittance fees._

and to _pocket_ some, preferably most, of the $25 billion “lost by migrants
every year through remittance fees.

Here, corrected that for you.

~~~
zaphod12
That's true, but you appear to imply that it's fundamentally bad.

I disagree with that strongly and it's a huge way the market functions - a new
company comes in and reduces costs for consumers, while still making a profit.
Old company loses (or changes), while the new company and consumers win. It's
how most discount stores work, airlines. Heck we're seeing it lately in equity
trading with trade fees dropping to 0. Sure, robinhood did it first to win
market share and make more money, but it's still been good for consumers. It's
how walmart and then amazon became so dominant (though they also reduced
services).

This is in no way an endorsement of anything facebook is doing, btw, Libra
scares the bejeesus out of me, but that doesn't mean the incumbents aren't
robbing people blind.

~~~
CaptainZapp
_That 's true, but you appear to imply that it's fundamentally bad._

Not necessarily and a lot has been done to smooth the path - and lower the
fees - for financial transactions. Mobile money in Africa (where you once, not
that long ago, had to entrust an envelope with cash to a bus driver, hoping
that it arrives at the intended destination) is a good example.

But I think that "helping the underbanked" is a smokescreen anyway.

Just like "Bringing internet to the poor", via internet.org, is a smokescreen
for the underhanded tactic of smuggling zero routing into the very fabric of
internet usage in poor countries and making Facebook (and their approved
partners) == Internet.

There's never _anything_ altruistic in whatever Facebook does. It's about
accumulation of ever more power, money and data. And you just need to look at
their short history for the proof in the pudding.

------
pcora
I have a feeling that they will end just launching something in developing
countries with weak regulation and will be done with it. It's a way to get
more data from people. It's becoming pretty clear that this will not fly in
the US or EU.

~~~
perseusprime11
They won't be able to do this in India or China.

~~~
gwbas1c
China is no longer a developing country.

They will probably be able to pull something like this off in a country with
poor banking.

~~~
perseusprime11
It is DOA if it has no adoption in US, Europe, India and China.

------
flywithdolp
Sorry but I don't trust anything that comes out of Mark Zuckerberg brain

~~~
mtgx
Because everything he does feels like it has another two-level deep plan
behind it.

Kind of like:

Level 1 (Zuck's thinking):

I'll tell them "We're building Thing X to improve Y in the world!" and most
will buy it like the gullible sheep they are.

Level 2:

Some will not buy it and think we're really building Thing X to track their
online activities (just usual tracking for ads and stuff)

Level 3:

Except what we're really trying to do is collect data so we can match their
ThingX profile to their supposedly-private medical records and DNA footprint.
But no one will figure it out until it's too late - and we'll be a few
billions of dollars richer by then (evil laughter in Zuck's mind).

There may even be a Level 4 for all we know. I'm not sure I'd underestimate
Zuck on this sort of thing. It always seems to be worse than we thought it
was.

------
dawg-
Facebook won't burn to the ground.

Best case scenario is that companies like Facebook start looking at data
security and privacy as assets that factor heavily into their competitiveness
in their industry. If they aren't as secure or privacy-forward as their
competitors, it will lose them business, _and not just on the user side_.
Apple seems to have realized this earlier than most, hence their latest
marketing campaign.

Losing huge business partners due to privacy concerns over the business model
will hopefully be a big wake-up call.

~~~
JohnFen
> companies like Facebook start looking at data security and privacy as assets
> that factor heavily into their competitiveness in their industry.

Companies like Facebook have a business model problem with this, though. Their
business model absolutely depends on violating people's privacy. It's hard to
see how they can factor privacy into things without entirely changing how they
make money.

~~~
ryan93
How are they violating privacy. Their service exists because people opt in to
it.

~~~
JohnFen
They gather information about me and my use of my machines even though I don't
use their services and haven't given consent. That's violating my privacy. In
fact, I consider it straight-up spying (I define "spying" as gathering
information about me without my informed consent).

------
espadrine
There are many leadership decisions that seem unimaginable when taken but that
are absolutely required for the survival of the company. One that comes to
mind is Microsoft giving up on Internet Explorer’s engine, or Apple switching
to Intel, or Adobe killing Flash.

Facebook will need to make this one: killing the Facebook brand, and a large
part of the Facebook Feed product.

Sure, Facebook can survive without making this call, just as Yahoo! survived
throughout Ms Mayer’s tenure.

Something that tells me they are currently unaware of that necesity is their
10K[0]:

> _Certain of our past actions, such as the foregoing matter regarding
> developer misuse of data, have eroded confidence in our brands, and if we
> fail to successfully promote and maintain our brands or if we incur
> excessive expenses in this effort, our business and financial results may be
> adversely affected._

[0]:
[http://d18rn0p25nwr6d.cloudfront.net/CIK-0001326801/a109a501...](http://d18rn0p25nwr6d.cloudfront.net/CIK-0001326801/a109a501-ed16-4962-a3af-9cd16521806a.pdf)

~~~
alecco
All that would be meaningless if Zuckerberg is still at large. They'd need a
180° cultural change. I seriously doubt that will happen.

------
mark_l_watson
I don't have any great love for Facebook (except for the Oculus Quest VR
product) but in general I like the idea of a digital currency backed by a
Special Drawing rights kind of mixed bag of currency (I think Libra would be
about 1/2 US dollars, and the other 50% split amount other currencies).

As a US citizen, I realize that we won't control the reserve currency forever
so it seems wise to slowly ease into all international capable transactions to
being done in a basket or currencies. As a US citizen, I would like the US
dollar to be a fairly large percentage of the basket. I think this is really
something that we need major cooperation between major economic power
countries to make this transition as smooth and gentle as possible.

If there were multiple digital currencies backed by real currencies like like
Libra, that would probably be for the best.

The goal is to reduce transaction fees and friction in international trade
(and all trade).

------
davidgerard
Facebook denied it then too, but first intimations of prospective Libra
members backing out due to regulatory heat came out in August:
[https://archive.is/5UsLx](https://archive.is/5UsLx)

~~~
tjpnz
Matters of compliance feel like an afterthought. How would Facebook make this
work in jurisdictions requiring photo ID and screening to establish whether a
user is politically exposed or involved in a criminal enterprise? How would
they handle users who failed that in jurisdictions requiring closure of
accounts? Surely they didn't think they could ignore that?

~~~
chii
i m sure they are going to do it uber-airbnb-style: ignore regulation and grow
until big enough to force it through.

~~~
tjpnz
My understanding is that AirBnB were mainly flouting laws passed by local
authorities which in a lot of places tend to be kind of toothless. If Facebook
were to employ a similar strategy against laws designed to combat money
laundering and terrorism I think the result would be very different. But I
wouldn't be all that surprised if they tried.

------
derefr
Having had a chance to talk to the Libra Foundation folks (where development
of the actual underlying technology is going on), they are themselves
distancing their organization from Facebook in every way possible, and have
been since the start.

To them, Libra is an open (to consortium membership) blockchain network,
whereas the thing Facebook is bringing to it is just a wallet product
(Calibra) for holding and transferring the Libra-native cryptocurrency. They
speak of Calibra with not-just-a-little distaste, in the same sense that you
might speak of a rich investor in your company that you never really wanted
investing in you but were desperate. They don’t really offer any special
support for, or primacy to, Calibra; to them, it’s an unseemly app by an
unseemly company that’ll _happen_ to boost usage of their network from “some
unknown blockchain” to “a blockchain 80% of the world has access to through an
app they already have on their phones” (so they can’t exactly just tell it to
go fly a kite.)

It’s interesting that, from the perspective of other companies in this
consortium (or perhaps just the news media’s interpretation of it), the Libra
Foundation “is” Facebook. It’s no more Facebook than, say, WebKit.org “is”
Apple, or any ASF Committee “is” one of its sponsoring partners.

In all of those cases, there are employees of the sponsoring company steering
the project, sure, but not in their capacity _as_ employees; rather, it’s
something they’re doing for the Foundation, not even billed to their employer.
(How do features get developed? The employees, as the employer, using billable
hours, create and submit PRs “upstream” to the Foundation. Then, the
employees, as members of the Foundation, _along with other Foundation members_
, vote on the PRs.)

Importantly, if the sponsoring company decided to withdraw its support from
any of the relevant projects, the Foundation would still exist, and those
people who are employees and also members of the Foundation _would still be
members of the Foundation_ —because they are _personally, themselves_ members,
not members as delegates of the sponsoring company.

Importantly as well, the employees who happen to also be members of the
Foundation almost always have an understanding with their employer
that—because they would be kicked out of the Foundation’s steering committee
if they showed any favouritism toward PRs made by their employer—they have to
treat their employer’s suggestions just like anyone else’s. With most such
projects, if you subscribe to the mailing lists, you wouldn’t be able to tell
they had any sponsoring partners at all!

I just want to highlight this, because it seems like nobody really understands
this until they work on at least one project run this way. (My own experience
is with Apache CouchDB, whose main contributor is IBM Cloudant.)

~~~
throwawaylolx
>It’s interesting that, from the perspective of other companies in this
consortium (or perhaps just the news media’s interpretation of it), the Libra
Foundation “is” Facebook.

Isn't this how they decided to market themselves? The first news of it had
Facebook plastered all over. Even their whitepaper says:

>Facebook teams played a key role in the creation of the Libra Association and
the Libra Blockchain, working with the other Founding Members. While final
decision-making authority rests with the association, Facebook is expected to
maintain a leadership role through 2019. Facebook created Calibra, a regulated
subsidiary, to ensure separation between social and financial data and to
build and operate services on its behalf on top of the Libra network.

Stating that "Facebook is expected to maintain a leadership role through 2019"
would also lead me to believe that Libra Foundation "is" Facebook for most
practical purposes.

~~~
derefr
“Facebook is expected to maintain a leadership role” in the Consortium, in the
sense that—as the news article states—none of the other nominal Founding
Member companies are bothering to do any steering of the Foundation. AFAIK
Facebook wants to get _away_ from the helm of the Libra Foundation ship and
give it over to the rest of the Founding Members ASAP (because that’s better
for Libra’s image!), but the Founding Members won’t take Libra seriously until
it gains traction (which it won’t until Calibra launches.) Kind of a chicken-
and-egg thing.

------
TazeTSchnitzel
[https://foreignpolicy.com/2019/06/24/971554-facebook-
bitcoin...](https://foreignpolicy.com/2019/06/24/971554-facebook-bitcoin-
libra-crypto-bad/)

------
tracker1
Good, it's a bad idea to have an electronic currency that doesn't allow person
to person transactions and is open to being ousted for politics.

------
neonate
[http://archive.is/GzuvL](http://archive.is/GzuvL)

------
baby
Genuine question: why do people keep upvoting content behind paywalls? Do
people just read the title and upvote it? Hoe many of the comments in this
thread have actually managed to read the article?

~~~
strifey
I frequently just do a google search for the title and click the link to the
same article there. Typically, I don't get paywalled that way.

~~~
espadrine
That is the purpose of the _web_ button below the title.

~~~
strifey
Whoa, I've never clicked that button before. Now I just want a firefox
extension that adds this to all paywall article links on all websites.

------
dnprock
This is a problem with media backed crypto currencies. Someone is going to be
a central authority.

We have a system that works fairly well in Bitcoin. The system is
decentralized and uses proof of work. It works well for being money. I think
the next innovations in the space are going to be incremental improvements
around this system.

Disclosure: I'm working on a project to change the economics of limited
supply: [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)

