
Facebook Cryptocurrency Plan Faces Opposition in France - velcro
https://www.bloomberg.com/news/articles/2019-06-18/france-calls-for-central-bank-review-of-facebook-cryptocurrency
======
orbifold
There is basically no way that a self respecting first world country will
allow this to happen. The national federal reserves in Europe are still
responsible for international settlements, that gives a tremendous amount of
power and oversight, they won’t allow a third party to take that away from
them.

Facebook may be able to buy off US regulators, but they won’t be able to
convince the EU.

~~~
Barrin92
Wouldn't be so sure that Uncle Sam isn't going to crack down even harder than
the EU. Financial control is a big part of US power abroad and I can't imagine
that the US government is going to tolerate a private entity taking that
control away, and that's probably for the better. This entire Facebook
currency thing sounds like something out of Shadowrun.

~~~
orbifold
I think it is likely that this is backed by a substantial set of US political
interests. People that want to experiment with UBI might want to see a
Facebook sanctioned UBI. This is basically any libertarians pipe dream.

On the other hand I think you are right. I expect any US based opposition to
move swiftly. Regulations should probably be the least of their concern given
how the US has treated entire Nation States trying to move away from US dollar
denominated Oil trade. It will be interesting to see what the equivalent of a
no-flight zone, arming militants and sending “advisors” will be.

~~~
elcomet
> This is basically any libertarians pipe dream.

Are you sure about this? I thought libertarians were against all institutions
such as the state with power over people.

UBI is a socialist policy. It seems in total contradiction with libertarian
principles to me. How is that possible?

~~~
orbifold
Well I am not a libertarian myself but as far as I understood people pushing
for UBI are also pushing for a drastically smaller administration which is
currently administering social benefits. This would be achieved by basically
eliminating most other form of benefits, similar to how they propose to hand
out vouchers for services like education instead of operating schools.

~~~
x38iq84n
You have misunderstood libertarianism, just because it wants to see small to
none state does not mean it would support UBI or other forms of socialism.

------
kumarvvr
Facebook has already wreaked havoc with it's power, it has shown how deceptive
it is, it has resisted regulation, it's chief executives have refused to
testify to governments.

Now them having a cryptocurrency is alarming. Why does it really need to do
this? There is nothing anonymous about facebook. Whatever transaction is done,
will be linked to your account.

This is dangerous.

Whether they start or not is irrelevant, as informed users, we must spread
word in our circle to avoid such cryptocurrency like the plague.

It will no longer be sufficient to try to prevent FB from going ahead with
this plan, because they will, if not now, after a few months or years from
now. The only thing that will prevent this from wreaking havoc in the world is
to spread awareness of how bad this is and how much more power it will give to
FB.

~~~
raxxorrax
> Now them having a cryptocurrency is alarming

I am genuinely surprised people would allow a company collecting data to be
their financial provider.

This is mostly contrary to the idea behind bitcoin to have a decentralized
currency beyond anyone's control. The unholy alliance between facebook, ebay,
visa and mastercard is certainly no advantage to the user.

But I am afraid convenience will bite us in the ass again.

------
Despegar
Haven't read any of the news about how this currency is supposed to work, but
if it lets anyone bypass the SWIFT system then the US should probably ban it
too. Being able to sanction anyone is a powerful tool to give up to Facebook
of all companies.

~~~
tim333
It bypasses SWIFT but only in the way bitcoin and similar cryptocurrencies do
already.

~~~
dmitrygr
statistically, so few people use bitcoin, that one might as well round to
zero, so governments do not need to care. FB has 2.5B users whom they can
easily manipulate, hence governments care.

~~~
cwkoss
I don't think governments 'dont care' but rather they are powerless to act
effectively against Bitcoin. A ban would legitimize its utility to people
skeptical of central banking. Because Satoshi is anonymous, there is no person
or team to attack with legal or extralegal coercion. Only way to effectively
take down bitcoin is to spend ~$1B building a huge mining operation with the
purpose of launching a 51% attack, but even that could be mitigated.

~~~
root_axis
> _A ban would legitimize its utility to people skeptical of central banking_

i.e. a tiny irrelevant niche. I don't think banning bitcoin is a good idea,
but a ban would be _highly_ effective because nobody cares enough to risk
fines or jail time over something they have no use for anyway.

~~~
cwkoss
A government can ban BTC<>fiat exchanges within their country fairly
effectively. A ban on transacting on the Bitcoin network would be extremely
difficult to enforce - VPN to a different country and they've lost you.
Cyberpunks could still cross borders to cash out, or just purchase digital
goods/services.

~~~
root_axis
> _A ban on transacting on the Bitcoin network would be extremely difficult to
> enforce_

1\. I disagree. There are many effective methods a government could utilize to
enforce a ban on transacting on the Bitcoin network. I could think of many
technical examples, like the use of weaponized malware and 0-days to spy on
the population and uncover users. Yes, some technical people could evade
detection, but most people (including most programmers) would be caught up
quickly due to opsec mistakes. There is also violence, which would be very
effective unfortunately.

2\. Even if they couldn't effectively ban transacting on the bitcoin network,
the network itself is useless if the state makes it illegal for businesses to
accept bitcoin.

3\. Strong enforcement isn't necessary since the masses are already
uninterested in blockchain tokens except as a vehicle for speculation. If the
government made it illegal most people wouldn't think twice about it. Why
bother?

------
tootahe45
>Parity with this basket of currencies will be reached via a redemption
mechanism similar to other stablecoins such as Tether

So.. no reliable way to actually get your monopoly money into USD? at least
they don't falsely claim to have the USD sitting in a bank, that's a start i
guess.

~~~
jmalkin
An article I read claimed exactly that, saying that the real money sitting in
a bank would also be used for generating interest to pay back initial
investors

Can't find the source but it was reliable, Techcrunch or the New York Times I
think

~~~
cynicalreason
They literally say so in their white paper. It's 'assets' not USD specifically

------
lowdose
Is Facebook establishing a new layer of network effects by implemention of
this plan?

~~~
wmf
That's clearly the goal, after seeing the massive success of WePay in China.

~~~
marco_salvatori
People who are unfamiliar with WeChat Pay in China, are underestimating the
potential for the FB cryptocurrency. The integration of social media and
payments by WeChat strongly facilitated consumer adoption of their payment
service. Everyone already had phones, everyone had WeChat installed on their
phones. When payment services later became available through WeChat, there was
a minuscule barrier for customer adoption. As people started using WeChat Pay
they quickly found it more convenient for physical and online payments, money
transfer between friends, and financial management. Next services like taxi
hailing + payment became integrated into the WeChat app, increasing the
convenience. The combination of convenience, preinstallation in the dominant
social application, and low barrier to entry was a killer combination. In my
estimation it turned out to be a stronger combination than Alipay, which
started out as a payment service integrated with TaoBao (comparable to the
Ebay / Paypal).

Since Facebook has a dominant social app and messaging app position worldwide,
their payments service will have worldwide penetration from day one. Since
Facebook can do software, the service interface will be more convenient and
user friendly that existing services in the first world, and infinitely more
so elsewhere. Money can be made here and evidence suggests people want to
adopt when there is a no effort road to adoption. There are vested interests
to deal with and satisfy on the road to market penetration, existing market
players and governments, but American entrepreneurs like Gates and Jobs were
able to overcome vested interests in their time and I suspect Mark is equally
resourceful when he wants to be.

~~~
CaptainZapp
There is one huge difference between WeChat Pay and what Facebook plans.
Namely, that the People's Bank of China[1] has an iron grip on all such
systems used in China.

Facebook plans a global currency undermining any control of the national
central banks and subverting national monetary policy. I don't think that any
central bank will allow this to happen.

Add all potential KYC and AML issues and I'm not sure if the "move fast and
break things" mantra is applicable in this case.

Money is not just a method of exchange in which the markets decide. The well
being of countries is directly linked to monetary policy. I don't think that
they really factored that in in their libertarian fever dreams.

[1]
[https://en.wikipedia.org/wiki/People%27s_Bank_of_China](https://en.wikipedia.org/wiki/People%27s_Bank_of_China)
[1]

------
atarian
Facebook is going to great lengths to stress how little they own, but I think
the point is moot; even this article is calling it a Facebook token.

------
tareqak
Not just France:
[https://apnews.com/d9f3a3ef897e4db2a637b6c5e59a3d54](https://apnews.com/d9f3a3ef897e4db2a637b6c5e59a3d54)
(Lawmaker wants Facebook to suspend currency plan).

------
cwperkins
Its quite telling that the promo video only shows people from countries with a
substantial unbanked population. I do think that getting these people banked
is safer and more secure for them (mitigates risk of being robbed) and enables
a more vibrant economy (more lending because of deposits), but why should
Facebook be the entity behind this?

I am a cautiously optimistic person, but this is giving me the jeepers. I
can't quite put my finger on it, but it doesn't feel right.

~~~
omeid2
> mitigates risk of being robbed

This is very unlikely, in places with social unrest people get forced to go to
bank withdraw cash, or even as far as sale goods to make the cash for
gangster, making it digital will make zero difference.

> more lending because of deposits

Lending by who? what deposits? lending most of all depends on risk which
requires a stable society and some resemblance of an economic system and
policy.

------
js4ever
What France really want is to tax it (even before it exist)

~~~
huis
Yes ofcourse they will.

When a county doesn't receive tax it will be a very big problem.

So countries need to be in control of the flow of money.

It is also a very big problem is an outsider can change the value of your own
currency. So you don't want US companies taking over your money flow.

~~~
koonsolo
It's _my_ money, so also _my_ flow of control, not that of the country I live
in.

I know this is open ups the whole discussion about cryptocurrenies all over
again, but maybe some people don't want government to have the monopoly on
storing and transferring 'money'.

~~~
seren
>It's my money, so also my flow of control, not that of the country I live in.

It is a bit less binary that that. Money is only a bunch of papers or bits
moving around.

The fact that everyone "believe" in a money is that if you don't play nice
with the bunch of paper or bits, like not paying your debt, "someone" will
make you pay, seize your asset, throw you in prison, or sell you as a slave to
your creditor depending on the jurisdiction.

It does not mean that the state should be the only one to have the power to
issue or create money, but without rule of law there is no money so to speak.
So I believe that "power" and "money" are more closely related that we want to
usually acknowledge it.

What is interesting is that with its global reach, Facebook has probably
already more power than a small state.

------
m3kw9
It just seems to be FB is trying to pull a fast one and it already knows
everyone saw it coming before it even moved.

~~~
m3kw9
I mean, they dressed up a pig, put lipstick on it

------
Entwickler
I would say it's meeting some opposition in the USA as well, starting with the
chair of the House Financial Services Committee.
[https://www.cnbc.com/2019/06/18/rep-maxine-waters-
facebook-s...](https://www.cnbc.com/2019/06/18/rep-maxine-waters-facebook-
should-stop-work-on-libra-cryptocurrency.html)

------
gexla
> When people are asked why they remain on the fringe of the existing
> financial system, those who remain “unbanked” point to not having sufficient
> funds, high and unpredictable fees, banks being too far away, and lacking
> the necessary documentation.

Unfortunately the reality of being "unbanked" is that government regulations
will still put up a barrier. KYC laws require "necessary documentation" which
these big providers won't be able to get past. Local options may still be
better in these cases.

For example, people who were born stateless may not be able to easily acquire
KYC documentation. They may not have documentation of being born. Being locked
out of ID options puts a limitation on getting past KYC.

In the Philippines, there are mobile options where you can deal with small
amounts of money without having to verify your identity. These options are run
by the major telco's here.

------
tasssko
This is all a game. Bitcoin and other coins are currently available for use by
anyone. Their value is decided on network effects or supply/ demand. It's not
regulated and can facilitate global transactions (I.e if you have patience and
time). For some people it's working well. What we will probably discover is as
long as Bitcoin is difficult to use and targets people with niche requirements
the government will look the other away. As soon as someone wants to make this
easier well things change. Libra was a very convincing sell to me. The
challenge with bitcoin is the volatility potential. Libra might convince more
people to think of Bitcoin more.

~~~
cynicalreason
Bitcoin value was influenced a lot by speculation thus it's volatility. If it
had more widespread use it would lessen it's volatile nature

------
chris_wot
I cannot understand why you would want to use Facebook's "currency". I'd just
use what we currently have.

~~~
john_minsk
Biggest bank in Russia (Sberbank) introduced a simple feature: if you know a
phone number of a person, you can enter it on their website and if the owner
of the phone number has any account with Sberbank you can send him money. The
convenience of such feature was so big that it caused people move from other
banks to Sberbank just to use it. Eventually leading to government regulation
making this feature bank-agnostic.

The point here is: people who are used to Internet and the way things work
here can't understand the old-fashioned companies.

Why sending money overseas cost such enormous amounts of money? Why bank fees
are so difficult to understand? Why there is fee when moving money within the
same bank, when we all know that it is simple transaction in the database?

~~~
skribbj
Same thing in Scandinavia, but it's a cooperation between banks. Know someones
phone number? Open the app "Swish" and send him money.

~~~
C1sc0cat
Why what is the use case here that bank transfers, cheques and cash don't
already solve

~~~
skribbj
Say you're out eating with mates and you want to split the bill, no one really
carries cash anymore here so that's not an option (and also annoying to
split). Writing a cheque is obviously ridiculous and a bank transfer requires
a lot of needless information. A "swish" as we call it takes about 10 seconds,
5 if your friend is already in your phone's contacts.

It's just an ease of access / quality of life thing. Your question is more or
less equivalent to: "What's the purpose of QR-codes? Just enter the URL!" \-
it's easy, fast, and frankly nice. A really really simple and great way to
send small amounts of money between people.

------
aurelienb
The future is already there. It's just not evenly distributed. So
Shadowrun/Cyberpunk 2020-2077.

They only lack of the extra-territoriality for their offices :)

------
colechristensen
>

~~~
hartator
SEC has no authority over France.

------
stlava
That didn't take long...

------
ei8htyfi5e
I put this in another thread but I've been shouting it far and wide today.

I've lived in China and seen how this plays out. Facebook's new Libra
Blockchain will be a centralized bank but way more dangerous.

It will allow for a worldwide social credit system. If Facebook decides to
remove you for wrong speak or wrong think, your money and many services will
be inaccessible.

Further, they have no mandate like the central bank does to increase
employment. Their mandate is to make money for corporations. This will lead to
global social unrest.

This will put some third-world countries in complete control by Facebook. I
mean, whoever runs the currency, is the country. But in this case, it will be
completely controlled, as it's also many of those countries main source of
communication. Therefore, if Facebook's Libra is a countries main currency and
social network, that country will be owned by Facebook.

Finally, the regulations on crypto and blockchain are still new. This is in
Facebook's advantage as they can start lobbying to have these laws in their
favor. They can argue for less transparency, as they are a bank, and this fits
with their new privacy marketing message.

This is extremely subversive and Europe is already rightly pushing back.
America will be next. On one hand, I love seeing the existing financial system
panic when new technology comes out. On the other hand, under no circumstances
will I accept a world where Facebook started the one world currency.

~~~
codesushi42
> _It will allow for a worldwide social credit system. If Facebook decides to
> remove you for wrong speak or wrong think, your money and many services will
> be inaccessible._

How is this different than what we have today with banks and credit card
companies? The government can already freeze your funds. And now there are
examples of people being censored online by being dropped by PayPal, which
sets a scary precedent no matter how terrible their beliefs are.

> _Further, they have no mandate like the central bank does to increase
> employment. Their mandate is to make money for corporations. This will lead
> to global social unrest._

That made me chuckle. The Fed has shown no concern for those who save by
keeping interest rates so dangerously low for so long. The Fed is also here to
make money for huge banks and corporations by making credit so cheap. In the
long run this may not be the best for employment. Even if it is, it won't be
for wages and wealth disparity.

> _This will put some third-world countries in complete control by Facebook. I
> mean, whoever runs the currency, is the country._

Not much different than the role USD and the Euro play in developing nations
today.

> _Finally, the regulations on crypto and blockchain are still new. This is in
> Facebook 's advantage as they can start lobbying to have these laws in their
> favor. They can argue for less transparency, as they are a bank, and this
> fits with their new privacy marketing message._

And what laws does Facebook plan to propose that are worse than the regulation
(or lack thereof) that exists for the financial industry today?

> _On the other hand, under no circumstances will I accept a world where
> Facebook started the one world currency._

I agree. I hope it is not Facebook that wins this game. But your other
comments are very reactionary.

~~~
TomMckenny
While the grandparent post may have misstated the threat, there is a real
danger here.

It is not just a new style of credit card. And while it will act like a bank,
it appears it will dodge regulation and consumer protection (limited as it is)
under the word "cryptocurrency" or some other neologism poorly understood by
the public and legislators.

Will Libra deposits be covered under FDIC? Will it be subject to closures when
there is a panic? What rights do depositors have in the event of wrongful
transactions?

So it's great if it allows people under repressive or kleptocratic governments
more security and freedom. It's fine if it's just a toy to send money to
friends. But it's another thing if it's just a bank with an unstated
"depositor beware" philosophy. It'd also be a lot less worrisome if the
company implementing it had a bit better reputation.

~~~
codesushi42
> _Will Libra deposits be covered under FDIC?_

That's not Libra's use case. It is pegged to other assets; it is meant to be
transactional, not held as a store of value.

> _Will it be subject to closures when there is a panic?_

Why do you consider that a _good_ thing? Would you really rather have your
money held by some bank in Argentina then?

Besides, the idea of cryptocurrency is that the money supply is not governed
by policymakers, which will help to avoid the conditions leading to those kind
of panics. In the case of Libra, it's pegged and its monetary policy is more
decentralized than that of a central bank.

> _What rights do depositors have in the event of wrongful transactions?_

What rights do you think that you have today? You're being subject to wrongful
transactions all of the time in the form of outrageous banking fees. Make no
mistake, the cost of "wrongful transactions" is being foisted upon you, plus
much more in the bank's own interest of making money.

------
_bxg1
Adding further support to my view that in today's world, (mainland) Europe is
civilization's last hope.

~~~
Bakary
What about Canada? As the ice thaws, it will be a perfect place to restart
after the Collapse.

~~~
frenchy
I wouldn't be that hopeful. We have quite a number of wackos for the same
reason that the US does (escaping religious "persecution" in Europe). Sorry.

Edit: also, much of the thawing land is the Canadian Shield, which is pretty
useless for farming.

------
negamax
When I first heard about FB's crypto plans, I got excited and concluded that
it will be a success because of FB's user base. Now that I know better. Libra
is set for failure. People will reject it indeed

------
dash2
"Faces opposition in France" is the new
[https://www.reddit.com/r/RussiaDenies/](https://www.reddit.com/r/RussiaDenies/)

------
ilaksh
They are going to get the regulators in their pocket and play ball with them.
They will filter all transactions requested and provide a convenient place for
governments to go for information or control.

Its a way for companies to capitalize on the cryptocurrency hype, without,
ultimately, acting like a real cryptocurrency. Its going to be a giant bank
that has government law enforcement and intelligence agencies as its clients
and patrons.

This is sponsored by Visa and others. They are co-opting "cryptocurrency" for
their own purposes. The goal is for this to become mainstream before real
cryptocurrencies and take over before they can really get going for mainstream
payments.

I filed a bug report.
[https://github.com/libra/libra/issues/41](https://github.com/libra/libra/issues/41)

~~~
schoen
Your bug report is amusing, but isn't it unnecessarily personal? Couldn't you
file a similar bug against the project that makes the point more concretely
without the personal attack?

~~~
ilaksh
If he feels like I really attacked him.. I mean I can't do anything to someone
who has that kind of control over the Dark Side of the Force. I'm not a Jedi
or anything like that.

I will probably make another issue that is just depressing and concrete about
the project and features no characters but it will be easier for people to
ignore.

