
What Facebook’s new currency means for the banking system - jkuria
https://www.economist.com/business/2019/06/20/what-facebooks-new-currency-means-for-the-banking-system
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mullingitover
Libra seems like the worst of all worlds. Zero anonymity like a credit card,
the untrustworthiness of Facebook, and with the paltry transaction throughput
of a cyptocurrency.

I saw the greatest minds of my generation destroyed by being tasked with
making financial Rube Goldberg machines.

~~~
ShorsHammer
Can you sign me up for anonymous credit card? Surely that must be worth it's
weight in gold. My current credit card provider can see the exact item
purchases I made from the supermarket then sell it off to third parties while
I need to ask for and keep a paper receipt to do so.

~~~
rienbdj
Apple Pay enables anonymous spending iirc

~~~
ShorsHammer
Find that incredibly hard to believe. I can pay money to an Iranian charity?

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pseingatl
"It is really much more like WeChat payments or Alipay or whatever than
anything else. The cryptocurrency part is largely a smokescreen and
marketing."

Exactly. Why FB added this hocus-pocus isn't clear at all it isn't needed
(WeChat does fine without it). A WeChat payment system that would permit
individual FB account holders to send "F-Bucks" to each other at low cost
would vastly disrupt the remittance payments system.

~~~
ilaksh
[https://youtu.be/1ee-cHbCI0s](https://youtu.be/1ee-cHbCI0s)

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ilaksh
Banks and governments are going to realize that Libra helps to defend the them
from real cryptocurrencies. Its completely tied to fiat, has no real privacy
or ultimate control over the wallet, no value on its own or anti-inflation
etc.

It is really much more like WeChat payments or Alipay or whatever than
anything else. The cryptocurrency part is largely a smokescreen and marketing.

The goal is for Visa, PayPal, and Mastercard (who are sponsoring it) to keep
being able to profit from digital payments, and to fight against things like
Bitcoin and Ethereum which are making major pushes to scale. They want to get
in ahead of real cryptocurrency.

Anyone in banking or government who is concerned about cryptocurrency
impacting their control will eventually figure out that Libra is the best
thing they could hope for.

I am worried that they will eventually figure that out, and then get quite
excited for Libra, then Libra will launch and really restrict uptake of
Bitcoin and Ethereum. Once governments get familiar with their convenient
Facebook Libra Financial Spy Portal they might even try to outlaw real
cryptocurrencies.

~~~
jakelazaroff
_> Banks and governments are going to realize that Libra helps to defend the
them from real cryptocurrencies._

That's not really a great selling point. So far most cryptocurrency adoption
has either been for speculation or illegal activity. It hasn't caught on in
the mainstream at all, either as a currency or a store of value.

~~~
seibelj
It’s becoming clear that cryptocurrency is a real threat to major incumbents,
and the reason corporations have signed on to Libra is to placate their
shareholders who are asking them for a blockchain play.

The benefits of digital assets are obviously better than old-school pen and
paper assets. The same arguments against the internet are being applied to
blockchain, and blockchain is going to win just as the internet won.

Fiat currency inflates and is subject to the whims of government.
Cryptocurrencies are managed by code. I prefer the code, and I imagine
citizens of countries like Venezuela and Turkey would also prefer code over
their corrupt governments.

~~~
jakelazaroff
How is it clear? Ten years on there are zero cryptocurrencies in wide use as
actual currencies, and blockchain has drastically changed zero industries
(except maybe malware).

The Internet had many popular use cases years or decades before investor money
poured in. Blockchain has already seen a bubble and a bust with exactly one
popular use case: trading cryptocurrency, which itself is only really used for
speculation and scams.

"Managed by code" is also not really a thing. Humans write the code! And
there's no real reason to expect the humans who create the cryptocurrency
ecosystem to be any more trustworthy than the humans in government.

~~~
Lx1oG-AWb6h_ZG0
And it’s not really managed by code anyway. Look at the DAO debacle: they
started out saying the code is the law, and when someone found a bug in the
code and exploited it, they changed the code by fiat. What is the point if
you’re going to end up human arbitrators anyway?

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TomMckenny
I now have read that the Libra will have complete liquidity, will be pegged to
multiple currencies and will earn interest (which goes to founding
organizations).

How can all these things be true? Are they just using these terms with the
same freedom they use the word "crypto-currency"?.

~~~
thoughtfunction
It's a multi-currency index fund consisting of deposits of currency from
users. I think the goal is to make an international currency that would be
stable across countries.

~~~
mullingitover
If it's pegged to multiple currencies, wouldn't that mean it's not stable
against _any_ currency?

~~~
gremlinsinc
The goal I believe is to be 1:1 in multiple currencies (or maybe 0.9:1 or
1.1:1 as close as possible -- so if you were to buy libra with japanese yen it
would cost 1:1, or possibly they'd do it based on the highest of the pegged
currencies, so if euro is highest they'd go w/ 1:1 euro, then when you cash
out to usd directly from libra, you'd go off the current euro:usd
differential.

It's definitely complicated, and I think going to be a management /
development nightmare. The best thing would've been just go with USD, or Euro
since those are the most used funds currently then have a built in forex
exchange to instantly change local currencies to libra based on their usd/euro
pairing rate.

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neonate
[http://archive.is/Q5Saf](http://archive.is/Q5Saf)

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saravana85
Libra could be dangerous because we could send money without letting our
original name or proof

~~~
anonymous5133
Libra is going to be a KYC/Anti AML coin. Not really sure how they're going to
100% enforce it though.

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bassman9000
_If every Westerner held in Libra an amount equal to one-tenth of their bank
deposits today, the new currency outstanding would be worth over $2trn. How
worried should banks be?_

Realistic start to the article.

~~~
codyb
Considering how in debt the average American seems to be (obviously not
representative of the entire Western world), I wouldn’t be surprised if it’d
put them in the red.

