
Libra still needs more baking - hhs
https://voxeu.org/article/libra-still-needs-more-baking
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Mengkudulangsat
Libra is going down the same rabbit hole as Liberty Reserve. Designing a
private currency always leads to insurmountable regulatory pressure.

There is nothing moral about agencies such as the FATF. They are products of
geopolitics, not user interests. Expect compliance requirements to get more
and more byzantine with no end in sight.

You can either comply (a losing battle) or you immunize (a-la Bitcoin).

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JumpCrisscross
> _you immunize (a-la Bitcoin)_

Honest question: do Bitcoin proponents honestly believe it “immunises” them
against the law?

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brazzy
I'm fairly sure GP meant that Bitcoin itself is designe to be immune to legal
interference. Individual users are not, although by employing a very strict
security regime, they can in principle stay completely anonymous.

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ac29
> by employing a very strict security regime, they can in principle stay
> completely anonymous

Doesn't that necessarily require avoiding legitimate financial institutions at
all costs?

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garmaine
Bitcoin isn’t meant to interface with existing financial institutions.

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fidelramos
Correct. It's actually in the first line of the Bitcoin whitepaper's abstract:

> A purely peer-to-peer version of electronic cash would allow online payments
> to be sent directly from one party to another without going through a
> financial institution.

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lgl
Wouldn't it be simpler for facebook and for its users if they just implemented
some sort of "FB Pay" equivalent to WeChat Pay that's tied to their messenger
app and be done with it? I'm definitely missing a lot here as I haven't kept
up with the latest libra updates but I seriously fail to see why making or
calling this a cryptocurrency is the way they chose to go although I'm pretty
sure there's a fair amount of greed and powerplay behind this.

Tbh, it is starting to sound a lot like some sort of real world e-coin that is
tied to some of the least privacy concerned corporations, banks and
governments and with none of the advantages of an actual decentralized
cryptocurrency. It looks as it will basically be just an analogous to marked
dollar bills but with easier digital traceability? Or am I going too much into
conspiracy theory territory?

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mehrdadn
What is Facebook's supposedly compelling justification for for being behind
Libra? On its face it makes about as much sense as having Facebook provide
health insurance or a grocery store.

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lmm
Sending money to friends/family around the world is still a lot more difficult
than it should be. Facebook is already the central hub for lots of families
and communities, so being able to easily send money over Facebook would be
nice, and having that tied to a specific traditional currency would be a bit
inconvenient.

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Panini_Jones
Hmm. That makes more sense now.

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Barrin92
Given that it seems like Libra wants to be an actual currency and comply with
pretty much the demands of a national currency, which is to say stability,
availability of monetary policy, features to clamp down on terrorism finance
and compliance with domestic law, wouldn't it be much more sensible to elevate
this entire project from Facebook to a national one?

Get more economists on board to design the institutional infrastructure,
people to get the legal compliance right, and then make it the e-dollar. (or
something more global in cooperation with other states). Isn't this at the end
of the day what people want out of this, the digital equivalent of a normal
currency?

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zdragnar
> and then make it the e-dollar

Correct me if I'm wrong here, but isn't most of our money already digital?
What do we gain, other than exchange fees if we want paper dollars and
cheques?

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Barrin92
Ideally, no transfer fees I suppose and universal access for every citizen
which was supposed to be one of the distinguishing points compared to say
credit cards.

It would have the potential to cut a lot of the middlemen out. I always found
it curious that with cash we basically take it for granted that there's a
ubiquitous, legally guaranteed payment infrastructure but with digital
currencies it's more like a splintered set of services that take a quite
considerable cut.

Also a very practical, relevant case. In a situation like this corona crisis,
there'd be a trivial way to send everyone their 1200 bucks.

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stephen_g
A lot of that is more a failing of the US financial system than financial
systems in general, of course.

In my country (Australia), our Government could deposit money into the bank
account that paid their last tax return with in less than a day... We have no
transfer fees and real-time transfers (you can link a phone number to your
account too). For international, things like TransferWise are pretty
compelling and have crazy low fees...

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fidelramos
There are people who don't have and cannot open bank accounts, especially in
third-world countries. Cryptocurrencies (I'm talking about Bitcoin and
friends) give them a way to receive money from anywhere in the world and store
it safely.

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skylarchunk
Really, really worried about the above-law-and-regulatory-measures governance
that Facebook is exercising nowadays

~~~
fnord77
we're in an age when big corporations are starting to wield more power than
governments. And nobody elected them.

They'll have their own armed forces, soon enough

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Hermel
No, we're in an age in which innovative projects are suffocated by shady
politics before they even onboarded their first user.

Remember the letter sent to Libra consortium members by US senators? [1]

They threatened Visa, Mastercard and Stripe with extreme regulatory scrutiny
of _all_ their payment business (not only Libra-related) in case they would
stay on the project. The threat worked and the threatened companies left the
consortium soon after.

This is right out of the playbook of despotic governance: create laws so
complex that everyone is probably violating some of them all the time and then
selectively enforce the law against those you don't like.

[1]: [https://www.brown.senate.gov/newsroom/press/release/brown-
sc...](https://www.brown.senate.gov/newsroom/press/release/brown-schatz-warn-
payments-providers-of-risks-with-libra-association)

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dschuetz
Good, let Libra die for good.

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arthurcolle
I would never use Libra, and I'm not sure there are many who would. But good
luck to Zuckerberg, I'm holding 190c 5/1s, so hope they make some smashing
announcement come earnings!

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spurdoman77
Remains to be seen what Libra actually would be. It is mostly at drawing board
for now. I could use it if it had some compelling use cases. There isnt much
privacy with financial transactions anyway.

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arthurcolle
Not especially simple to buy contraband using dollars electronically, over the
internet. If we assume those contraints, there are existing solutions that
actually work without as much immediate interference.

A dollar replacement with zero additional benefits (like those mentioned
above) seems like the exact "solution without a problem" that existing
"blockchain" tech was pretending to not be. TL;DR - this won't work!

