I'm of course not familiar with the specific mindsets and the history of this decision, but I want to share a bit of cultural perspective from Germany that is so far not really considered in this comment section:<p>Germany is very, very keen on preventing powerful entities from acting outside of regulation and similarly, if not more, on preventing a single entity to get in control of everything. This is largely due to some foobar in the last century, which I'm sure everyone is aware of.<p>So if Facebook, 10x of Germany's population comes around the corner with a proposal akin to "Hey do you mind if we just skip the paperwork part and just control currency, while actually being a social media tech giant" there going to be up against every trick in the book. This is not hypocrite behavior because Germany allowed some fun regional currency project no one is aware of some time ago. This is much more protecting the idea of the German society.<p>And personally, as a German, I'm really glad about it. You remember the hundreds of cases of worked with a scummy developer on an app once, now I'm blocked out of my email and all my files stories? Now imagine that, but with <i>money</i> and with a company who never even bothered to pretend it isn't evil - this is gonna be a no, thank you!
> “no private entity can claim monetary power, which is inherent to the sovereignty of nations”<p>What a bizarre statement. Providing for security is also inherent to sovereignty of nations, but private security firms flourish.<p>It's also odd in the context of Germany in particular where a private currency has been used for many years:<p><a href="https://en.wikipedia.org/wiki/Chiemgauer" rel="nofollow">https://en.wikipedia.org/wiki/Chiemgauer</a><p>I suspect there's a lot more behind this statement than meets the eye:<p>Inflation, and the ability of the state to force it upon its citizenry by forbidding the use private money - has come to be viewed as inherent to the sovereignty of nations. The world's governments are now entering a new phase in which none can afford to hold the more valuable currency due to the damage caused to export business. Net importers like the US have been holdouts, but even it too will have to bow to reality.<p>This conflict means that, no matter how well intentioned, policy makers will be feel compelled to devalue their own currencies. It's a race to the bottom, but without a bottom. Alternatives, especially private alternatives readily available to citizens, will increasingly be viewed as the enemy.
Best thing I've read on Libra: <a href="https://foreignpolicy.com/2019/06/24/971554-facebook-bitcoin-libra-crypto-bad/" rel="nofollow">https://foreignpolicy.com/2019/06/24/971554-facebook-bitcoin...</a>
I think this action is a symptom of a much larger, and much more serious disease, namely the fall in trust for traditional fiat currencies like the euro and the dollar. Decades of irresponsible monetary policy and runaway inflation (CPI does not capture the whole picture, look at asset prices the past decade) since the abolishment of the gold standard has lead the general public to indirectly feel disenfranchised with the current monetary regime and I truly believe that we will see more of this kind of action in the future as fiat currencies continue to lose value and eventually collapse due to the extraordinary injection of money that most western central banks have been pursuing in the past couple of years.<p>Governments feel threatened as the power to levy the inflation tax is being eroded with the rise of cryptocurrency, and I think the next couple of years are going to be very interesting as more businesses adopt crypto as a means of payment. And I wholeheartedly support this development, because much of the inequality that we've seen in recent years and general social turmoil is a direct consequence of irresponsible monetary policy.
I dislike Facebook but I kind of feel sorry for them now because any ambitious thing that they'll attempt will probably be blocked by governments now.<p>Facebook and Zuckerberg deserves it though.
They say:
> “no private entity can claim monetary power, which is inherent to the sovereignty of nations”<p>They mean, "When the establishment rigs the economy by diluting the national currency, then the establishment must not let their citizens escape the damage".<p>People talk about a "rigged economy". Where I found in economics it really happens is 3% inflation that comes from constantly printing money. Low income and the middle class often don't get 3%+ yearly pay increases. When they accept a job, the economy is rigged against them by 3% inflation based loss in their pay level, every year (over and over). When people stay at jobs 10 years, 3% year-over-year devistates people.<p>1801 to 1899 had ~0% inflation when it was on the gold standard with sound money. 3% yearly inflation came after moving off of the gold standard and with printing money.<p>Printing money hurts workers.
As a European I'm very happy about this decision. I'm not against Cryptocurrencies but Libra is an attempt by some of the most corrupt and unethical entities in the world (Facebook,...) to control financial flows.<p>I can only hope other countries will follow soon.
I think the trend of demonopolizing currencies is unstoppable, just take time. I argue that this can be part of a new cold war dimension between countries and when some countries block financial initiatives others fund an opportunity. I wrote a little bit more about this vision in [1].<p>[1] <a href="https://blog.coinfabrik.com/libra-association-a-menace-and-an-opportunity-for-blockchain-ecosystems/" rel="nofollow">https://blog.coinfabrik.com/libra-association-a-menace-and-a...</a>
I think Libra is a fine digital currency. It explores semi-centralized/semi-decentralized category. The main problem with Libra is its timing. It's too early. I don't think the market is ready for it.<p>Most people think Bitcoin is working as a digital native currency. In reality, Bitcoin is not doing anything much. Bitcoin community is sticking with digital gold, Store of Value narrative. That makes Bitcoin uninteresting. Normal people cannot really use it.<p>There is a big gap between digital native crypto like Bitcoin and government issued currencies. The market needs to evolve to fill in the gap before we can use a currency like Libra.<p>I outline the problem I see in the below article. I think we need a digital native stablecoin to connect Bitcoin to the real world.<p><a href="https://bitflate.org/post/2019/08/26/bitcoin-missing-link-to-the-world.html" rel="nofollow">https://bitflate.org/post/2019/08/26/bitcoin-missing-link-to...</a>
What other times in history have private corporations taken on government entities and succeeded? Have any of these attempts been on this scale and against an entity of this power (i.e. proposing a new monetary policy against the US Federal Reserve)?
Can someone familiar with Libra speculate how a ban can be implemented? What comes to my mind is forbidding Facebook selling and processing it for EU users but beyond that, I am not sure how a "black market" could be prevented.
nations also used to be convinced it is inherent to their sovereignty to tell us who to worship and who to marry. this is no longer the case.<p>not sure there is a principled reason why the power to govern the exchange of goods and services (which is what money facilitates) should be up to them.
What do they mean to "block Libra"?
To block merchants using it?<p>If yes, I think it won't matter at all.
EU already have real-time electronic payments
and mostly everyone uses contactless cards
or appley/android pay.<p>I think the benefit of Libra, as peer-to-peer money
is valuable for countries in Africa or other parts
of the world where cash is king and unsafe (due to high crime rate).
This was a political statement.<p>It is far from clear that Libra would be in conflict with existing laws. Probably new laws would need to be written to forbid it. Germany has not had any capital controls after WW2, so I don't take it for granted that such law would pass. On the other side Facebook's reputation in Germany might be even worse than in many other countries, so that could create political pressure, even if Libra is legally not the same as Facebook.<p>Personally as a consumer I see the biggest problem is customer support and accountability. Banks are not known for closing customers accounts and keeping the money. Internet giants are known for no customer support and (automatic?) deactivation of accounts for unspecified violations of terms of service. (Has happened to my Microsoft Drive where I stored 1 file, an encrypted backup. And HN readers have read about more cases)
I will show this comment to my grand kids one day - Do whatever you can, think whatever you like - By the end of this decade, we will have at least half a dozen such currencies with a couple of them in active circulation. Whether Facebook succeeds or fails - they have covered so much ground in pushing existing establishment on value of an universal currency, offered by firms that provide services directly to customers - that it now becomes hard to ignore.<p>Crypto currencies such as Ethereum and Bitcoin will ride on the coat tails of these currencies to be truly first class citizens of the banking world.
There is a relatively low understanding among the public of how money is created and how the economy expands in today's modern economy after 1971 Gold standard deviation.<p>If some part of the monetary system is taken over by something that is not money, it is almost impossible to be able to control the amount of money in circulation or inflation or the need for new government money will be uncalculatable.<p>I can not comprehend any country allowing this unless it has got some extremely high tech mechanism to control the amount of money that goes into crypto/libra.
I find how Facebook continues to <i>actually</i> push for Libra astounding.<p>I was at Best Buy the other day, and as I was browsing through the home automation shelves, my eyes were quickly attracted by an ugly logo, blue over white with an atrocious font -> "Facebook Portal".<p>While I did remember hearing about Facebook plans to just, build this home camera+microphone connected thing, never would I imagine a remote universe where this product would actually hit the shelves. In fact, I naively always thought there are these teams called product and marketing that among other things are supposed to analyse the market and predict consumer reactions. I might be entirely wrong of course but I never ever imagined a world where such a product could be sold to a customer while being branded Facebook at the same time.<p>I have exactly the same feelings about Libra. A currency controlled by a corporation is a "no thanks" to begin with, but in the case of Libra we are talking about the last corporation anyone with a sane mind would ever consider (a bit of exageration here but let's say, one of the worst). I seriously have a hard time understanding how those evidences are not determined internally before communicating such plans publicly. It is either trolling, or there is a serious problem of isolation and there might be a yes men plague in this company.
Problem solved, use USDC. Not invented here but what did you really have to add anyway? A non-sovereign unit-of-account was just a bad idea for consumer adoption anyway. We still have issues with financial literacy here, why not seek simplicity? I'll tell you why not, because it doesn't satisfy someone's career advancement metrics forced on them by a misguided peer-review/stack-ranking system. What other justification was there to use Libra in lieu of anything else?
Libra is backed by real world assets, to try and prevent wild fluctuations! Having it backed by real world assets make no sense! Defeats the whole purpose of crypto!
"no private entity can claim monetary power, which is inherent to the sovereignty of nations" - very bizzare statement. What's "monetary power"? If it's the power to make certain medium of exchange legal tender, Facebook certainly didn't claim that, moreover, by very definition of it such power can not belong to a private entity - a private entity can not force German government to accept taxes in Libra, for example. The power to set legal tender is inherently governmental power, and there's no need to proclaim this banality as something that isn't obvious by definition.<p>On the other hand, there are thousands real and virtual moneys that exist and can be exchanged for real and virtual goods - from game money to crypto tokens to vouchers to points and miles, and so on. There is literally thousands of entities that create means of exchange that later can be exchanged for goods, and commonly are - and nobody has ever had trouble with that, at least not in any free countries (in USSR, you'd got no miles for flights :). So what changed?
I think the biggest threat that the US government sees in crypto currencies is the ability of adversarial countries (Russia, Iran, etc) to avoid sanctions. If you want to conduct international financial transactions, you must do it in US dollars, and the US government controls that.<p>In the future, if governments (or private entities) can get around that, then the US doesn't really have any non-military leverage. The US government seems interested in Libra because if it grows and becomes the de facto crypto currency in the future, and they have a good amount of control over it, then they don't lose any power.<p>Then again, they might lose control over it while Facebook just hustles everyone for their data and money. France and Germany are probably interested in the international financial systems being stable, but are probably a lot less inclined than the US to bet on Libra because they don't control the US dollar right now anyways, and if anything goes sideways they can't really control FB either.
This is pretty much exactly what I said the response would be:<p><a href="https://news.ycombinator.com/item?id=20252375" rel="nofollow">https://news.ycombinator.com/item?id=20252375</a><p>Currency and sovereignty are inseparable, have been for all of human civilization.
With a16z, eBay, Mastercard, Stripe, Visa, Spotify, PayPal, Uber, and many others, this is not just about Facebook.<p><a href="https://libra.org/en-US/partners/" rel="nofollow">https://libra.org/en-US/partners/</a>
Good. Nobody wants Facebook money. Countries like Germany and France have a better track record being trustworthy than a company like Facebook. Facebook has been proven several times over its very short lifetime to not be trusted.
What if facebook allowed libra holders to hold elections and vote for the leadership of the project? They could build the worlds first virtual state, arguably a very popular and populous one.
Is EUR a threat to souverinity of the nations then? What is the difference between libra and BTC if not the sad state of affairs wrt to btc's usefulness as an everyday currency?
As a french, this is exactly what I expect from my government. Libra is a putsch by a (vampiric) private sector entity that want to concentrate powers.
The beginning of the article reads... "In a joint statement, the two governments affirmed that “no private entity can claim monetary power, which is inherent to the sovereignty of nations”. Is this irony in the US that a private entity, the Federal Reserve, is in just such a position of monetary power. It's all smoke and vaping, chickens and eggs, hemp and da kine.
I for one welcome Libra, but only for exactly one purpose.<p>The next time governments bail out another bank, they should just hand them a zillions Libras and ask the banks to collect the actual money from Facebook when they need it. Don't know if that is technically possible, but I would certainly support such a bailout scheme. :-)
Pride comes before the fall. Facebook should have spent much of their energy fixing their image first and not tackling anything like Libra. If they need money they need to focus on products that provide real value without intruding on privacy. They need to study how Microsoft turned around their image. It takes time.
Imagine the power of the United States if it controlled the world’s currency through Facebook’s Libra as a reserve currency? Oh wait the U.S. dollar is already the world’s reserve currency and is included in over 50% of the world’s FX transactions. Not much would change.
Does the use of cryptocurrency allow people to evade taxes? Does it allow bad actors to transact dangerous goods? People have good and evil within them. If you give people complete freedom, there will be those who allow evil free reign. Trust but verify./
The problem lies in the unit of account. If Libra becomes one of the global unit of accounts with own money supply outside of other monetary sovereigns reach while still keeping the impact on their economies, then Libra is a direct threat to their economies.
Libra is not all that bad. While there are problems with Facebook gaining yet another source for information that takes advantage of privacy terms, I think a stablecoin by GAFA is in the right direction. It speeds up the adoption of cryptocurrency by a lot.<p>Paypal and other "digital cash" solutions are fully centralized which makes it impossible for devs to build on top of their platform. This means that problems that arise cannot be solved by devs looking at the problem from the outside.<p>Libra gets around this by having an open platform that anyone can build on. Anyone can create a Libra wallet, and anyone can build Libra services. If we have a big privacy problem with Libra in the future, we might be able to find a way around it. Libra supports scripting on-chain which would make atomic swaps possible. If something like atomic swaps are possible, can we hide information from Facebook et al? Or what about mixing Libra on-chain?
Excuse the ignorance... but what do France and Germany specifically fear? That if Libra would become more popular than the mainstream fiat currencies Facebook could have more control over the economy than governments?
I thought, whatever is not explicitly banned is allowed. The article is just a fragment, it is not clear if it is just a politician voicing an opinion, or the declaration of policy by the governments.
California pats itself on the back for passing massive social reform measures while its flagship tech corporations are going to town picking apart people's lives and profiting from them.
That Zuck...is he really trying to turn the crypto community from wanting to abolish banks towards appointing Facebook as the biggest too big to fail bank in history?<p>People seem to be swallowing it, though.
What technical distinctions between Libra and cryptocurrencies running on other permissioned blockchains (like Lumens/Stellar) would prompt this type of regulatory response?
This is probably one of the reasons why Satoshi Nakamoto didn't use their real name - If there's a single entity for governments to target, they will.
I thought it was irresponsible of FB to announce this thing. All over the world the question is not whether or not to regulate Facebook. It is <i>how</i> to do so. So, it strikes me as some kind of supreme arrogance or dishonesty to announce a <i>currency</i> without expecting it to be immediately shut down by governments. How does this pass internal review?
It reminds me of this off shore city facebook wanted to build or something like that.<p>The problem with big money and big idea people, is that at some point they want to build a new world, but if you ask them about the old world, they don't have a solution, and deep inside they would rather see the old world burn to the ground. They're not even obsessed with power, they just want to build new things like they built an app in 1 month, to see if it could work, because the idea is sound and that it might solve many problems.<p>Those guys always have big big ideas but the truth is that they have absolutely no clue how the actual real world have been working for centuries and what are the real cogs of human society. It's like history doesn't matter, and that silicon made everything completely obsolete.<p>If you understand this, in a way, you can definitely understand why China has a big firewall. And frankly it sounds like the internet has just turned into a big advertising, political propaganda machine that just turn people into consumerist monkeys. Of course it's serving american hegemony pretty well, especially if you look at how google is siphoning data all over the world. I'm glad that countries are realizing that internet is not the cool thing of the 90s anymore.<p>What's weird is that facebook is now a thing for old people, the young doesn't even use facebook. I stopped using facebook in 2010 so I would never have known anyway.<p>Frankly there are days I wish the internet would collapse. GDPR is already setting a big fight, the battle against US digital giants is far from being over and I hope it keeps going.
Typical government don't want:<p>* easy cross-country payments<p>* non-government money institutions<p>'Cause money always been the major element of government power.<p>For typical people, I think, Libra and similar are more positive. If you can pay someone in Africa from Japan with minimal fees/headache, it's very cool.
Internet giants should not be able to circumvent or manipulate the economy of any country, by creating a currency. It's fucking mad and wrong by design.
I'm surprised at the amount of hate that libra seems to be getting, even on the tech-startup forum of HN. Are we all becoming a bunch of Luddite conservatives? When I look my own life an experiences, I can't really say I feel any of the alleged horrors cast down upon us by big tech. I get that privacy is an issue, but ... it is avoidable. I host my own cloud(nextcloud), use tracking blockers, avoid signups...etc.<p>Personally, I think its an interesting project, with both interesting technical, monetary, and political problems that will be encountered. I'm looking forward to seeing how it turns out.
Other than the fact that they have some sort of block chain backend, how is Libra even different from Venmo?<p>Seems like they're just banning it because they don't understand it.
Dumbest move ever by Facebook to preanounce and give governments time to complain. They should have moved fast and dealt with the consequences later. They had a reasonable chance of being the dominant cryptocurrency, and instead they get to spend a year apologizing and backtracking before they ever deploy.