Posted on July, 27, The first reactions of the establishment to Libra
As predicted in the previous post, the reactions of the different elites to the Libra project did wait. Most of them are emotional responses not accompanied by analysis : our thesis for which the establishment is realizing early on that the Facebook initiative could change the rules of the game, at their disadvantage, finds it therefore confirmed.
The reactions in fact are all negative, or at the slightest alert, and come from power centers, mostly Anglo-Saxons and supranational, very diverse : they are based and leveraging in the fear that the introduction of Libra has two consequences. The first the instability of the current financial system and, the second, the proliferation of digital regulations of transactions with illegal activity. In other words, as hypothesised, the phenomenon is perceived by the establishment no more as the niche of Bitcoin & C. but as a potential factor of disruption, especially in the US Dollar area.
A third group of negativity has as the pivot of reasoning the indiscriminateuse of the data Facebook has made up to now, and is continuing to do, respect its users.
Outside the box of cry wolf, and with regard instability, interesting the thought of IBS, the International Bank Settlements. It highlights how the process of tokenization of national currencies initiated by several central banks, in the first place Sweden, already alone will marginalise a class of parasitic banking operators. If the citizen can have his own deposit account in crypto-currency at the central bank there is no reason why he should also have to hold an account at a commercial bank. Instability factor is the hypothesis that Libra becomes a global competitor to such national-cryptocurrency, depriving the central banks of economic policy power.
This is the main source of concern, and aversion, expressed by China to Libra and a (pragmatically) declared issue of acceleration in the introduction of the crypto-yuan.
In another perspective, the value of any economic and financial assets is based on the reputation perceived by the markets on who issues it : perception on Facebook lately is not at its peak for institutional and public opinion imaginaries. Even if Facebook is just one among the different that make up Calibra, who will guarantee the value of Libra when, sooner or later and for unavoidable historical needs, will the fixed exchange be abandoned against the reference currencies? And, in this option, if peoplefind out that Zuckerberg has arranged another data trick? In the event that Libra becomes a global monetary player, the reputation of Facebook is a serious factor of stability.
The quantitative and qualitative pursuit of the illicit activities, to lead them to a socially endemic level, is impossible. Impossible therefore is also the use of ‘follow the money ‘, of the monetary regulations of transactions stemming from illegal activities, with a socially acceptable pervasiveness. The chosen path, in the absence of anything else, is the preventive one of to impose on intermediaries to track all transactions and related actors : in this way it is hoped that in the middle, if necessary, there are also those arising from the illicit (with peace of individual rights and privacy, digital or not, of each one). Libra in this perspective represents a problem as much as the other cryptocurrency : but from the very beginning Calibra has stated that it will adhere to the various KYC regulations. So, for now until proven otherwise, you don’t understand where the specific concern is based respected the myriad of other actors, especially no-crypto.
The third source of negativity is the use of the monetary information that Facebook will collect about the users. This is an argument that with the Libra object has little to do with it : the problem is the data at Facebook and other big-players, and the behavior of the same, not the monetary instrument. There is no doubt that the information will be qualitatively and qualitatively more significant, so it will allow better profiling : it is, however, an avulsed issue from Libra because it invests a higher level.
In Italy, two esternations to be highlighted. Paolo Savona, in the annual report of CONSOB, initially slips on the hope that the blockchain technology should be a state monopoly (!!): may the collaborators not have explained him the concept of open-source?. Then the dear teacher recovers, proposing the prophecy, already expressed and underlined in these pages, of potential risk of upheaval of the current monetary system if, one or more corp with stature get serious, which seems to be going to happen. The second performance by Davide Casaleggio, which proposes that Facebook set up the entire Libra and then donate everything, or almost, to the UN as seal of conduct and impartial control. Apart from the fact that it is enough to read the UN budgets (and its ten-year investigations about) to come to the conclusion that a normal person at the UN would not even entrust the conduction of a fruit stand (regarding economics, impartiality and transparency) ; but, regardless of, some private financial giant has never done this to date? After the 2008 crisis was this a path followed by who the crisis caused it or by whom did it have to rectify it? Why should Facebook be doing so in advance, especially as Calibra is no-profit yet? Things of another world for those who think about it and for those who publish them.
Finally, the silence continues from the other big-players and Libra’s project leader, Davis Marcus, was heard in committee in the US Senate succeeding, with undoubted ability, in not uttering any substantial novelty.
This is adaptation of a neuronal Italian/English AI translation by IBM Watson.
Below links for further reading on the concepts expressed above.
⚖️The Libra Observer: Facebook’s Libra, Back (analysis) to Square (scenarios)
Posted on June 27, the first scenarios about Libra.
Will China be forced to develop its own cryptocurrency in response to Libra?
New digital currency could have major impact on monetary policy and financial stability, warns Wang Xin, director of…
US lawmakers seek 'immediate' halt to Facebook's digital coin
US lawmakers have called on Facebook to halt its plans to launch a digital currency "immediately", until regulators and…
Consumer Advocates Urge Libra Members to Quit Facebook Crypto - CoinDesk
A coalition of consumer advocacy groups has urged the 28 member companies of the Libra Association to quit the…
Regulate Facebook's Libra currency, France's Le Maire says
CHANTILLY, France - Any payment system that Facebook sets up must be regulated and face the same dirty-money standards…
Libra, Casaleggio: "La faccia Facebook, ma poi la regali all'Onu"
Finanza i soldi di internet di Davide Casaleggio* La moneta come la conosciamo è un'invenzione recente e si è evoluta…
We just got a clear sign that Facebook's dodgy reputation means it has a massive struggle to…
Most Americans don't seem to plan on using Facebook's cryptocurrency, Libra. A survey by Jefferies found 80% of US…
We've had private currencies like Libra before. It was chaos.
Government-backed currencies rule the world. But they could soon face legitimate challengers in the form of private…
Fed Chair Raises 'Serious Concerns' About Facebook's Cryptocurrency Project
Facebook is facing a growing chorus of doubts about its new Libra cryptocurrency project from authorities around the…
IMF says regulators must address possible risks from Facebook's Libra
WASHINGTON (Reuters) - Facebook Inc's planned cryptocurrency, Libra, could help boost financial inclusion, but also…
Facebook 'delusional' over cryptocurrency plan
Facebook's plan for a cryptocurrency has come under further attack at a US hearing, with politicians calling the…