Why Facebook’s Libra Faces a Tough Road to Becoming a Crypto Giant | WSJ


– Facebook’s proposal to
create its own digital currency called Libra has gotten a lot of basklash from global regulators. – Facebook has burned down
the house over and over. – It’s been the subject of acidic U.S. congressional hearings
and France’s finance minister went so far as to say
that it was an assault on national sovereignty. (man speaking foreign language) Officials in other
countries, including China, Germany, and Italy has
expressed similar concerns. Here’s what regulators are worried about. For one, lawmakers worry
that Libra has the potential to disrupt the monetary system. If Libra becomes the currency for Facebook’s 2.4 billion or so users, to say nothing of other
companies that might accept it, it could become a
globally-significant currency. How? Libra is going to be what’s called, in crypto markets, a stablecoin. It’ll be a pegged currency
that maintains, basically, a one to one value with the U.S. dollar. That’s a different model than bitcoin. Bitcoin trades freely, and
its value is determined solely upon what people
are willing to pay for it. To maintain that peg, the group that will be
governing this currency, called the Libra Association,
will maintain a reserve. For every dollar’s worth
of Libra that is created, one dollar is going to
be put into the reserve. Theoretically, that
means that this reserve could hold billions or
even trillions of dollars’ worth of currencies and
short-term securities. That is a very powerful
tool in capital markets. If that money got moved
around significantly from one currency to another, it could absolutely upset global markets. (crowd cheering) Now, that’s not to say that Facebook or the Libra Association
is expected to do something like weaponize these reserves. However, this is the first
time that, not a government, but a private company or
group of private companies would have that kind of power.
– Look, we don’t want it to– – Facebook and the Libra
Association of companies backing the project say they are committed to working with authorities
to achieve a safe, transparent, and
consumer-friendly implementation of the digital currency. Lawmakers, who are already
looking into Facebook for a number of other reasons, are not comfortable with Facebook’s power. The tech company is battling
scrutiny on multiple fronts, from its role in elections to privacy to even antitrust investigations. – Facebook is dangerous. They don’t respect the
power of the technologies. – [Paul] Facebook’s business model, its role in spreading propaganda, and its controversial
efforts to rein it in have infuriated lawmakers. – We will have to make
very strong commitments so that people trust us
and we will have to honor those commitments for a
very long period of time to earn people’s trust. – At the core of a lot of the distrust among governments is that
Facebook has been criticized for its handling of user data before, and Libra would create a traceable record of all its users transactions. Just imagine a company
being able to combine your identity, your online habits, and your spending patterns. That is an unprecedented ocean of data. At this summer’s congressional hearings, Facebook executive David
Marcus said the company and the Libra Association will keep the spending data separate
from the user identities. Lawmakers, of course,
were skeptical of that. – I have serious concerns
with Facebook’s plans. – [Paul] Regulator scrutiny
is one of the reasons Libra’s viability has
been called into question, and some key companies that
initially backed the project have ducked out, with
Visa saying its decision to work with the project in the future depends on Libra’s ability to satisfy regulatory expectations. We’ll have to wait and see if
this scrutiny from regulators makes Libra stronger or ends up threatening
its existence altogether. (dramatic mallet percussion music)

45 thoughts on “Why Facebook’s Libra Faces a Tough Road to Becoming a Crypto Giant | WSJ”

  1. We all know …Zuck is trying to start a new Central Bank via Libra .. ultimately to undermine the USD… also.. huge money laundering for the rich and CIA games…wars weapons drugs

  2. Do we really want these cooperations control our life even more? Isn't enough to realize is time to say no when in each crisis they perpetrate they get away with it by saying they acted slow?

  3. Banks are just worried about losing their global monopoly. If Banks had the opportunity like Facebook they'd done it long time ago.

  4. It’s almost like people don’t want to trust a company that has a known reputation for selling consumers private data (Which is in the terms & conditions mind you), there is nothing stopping it from doing the same thing for all of the users for the block chain technology. The USD operates on Fiat money, that means that it only has value because people think it has value, there are no gold/silver/metal reserves to back up the value of the currency. Given all of the negative press surrounding Facebook, it and the members of the Libra Association, will have to have so many layers of privacy behind them that it will make the spending data worthless to them.

  5. OMG people, Zuckerberg who looks like he just rode up on his skateboard, wants to print his own money. I'll keep my money in my mattress, thanks.

  6. Don’t trust Facebook with your money. Don’t trust any word Zuckenberg says, didn’t he promise founders of WhatsApp and Instagram that he wouldn’t put Ads on apps after taking over?

  7. NEVER CHALLENGE US DOLLAR!!!! Look at Iraq, Lzbia,Syria.. All they have in commen, was trying to sell Oil using other currency.

  8. Facebook lies. Zuckerberg is a liar and a bullshitter in android face, that's why. How many times is this guy going to apologize for the same thing before regulators get hip to his con. Well I guess they are starting to, anyway.

  9. You know, in the future humans will be produced, like with artifical wombs, no parents, no nothing, and we will all belong to corporations…

  10. FYI, The federal reserve was a cartel of private banks not a government entity. Jefferson warned us that if you ever let private banks control of your money, corporations will gather around those banks. First through inflation, then through deflation, your children will wake up homeless and bankrupt in the country their fathers conquered. Pretty insightful, I wish we had here to get his advice!

  11. The Prime Minister of France says it's an assault on national sovereignty.
    Of course it's an assault on national sovereignty, fool.
    But that's the only good thing about it.
    Putting any financial instrument in the hands of America's Big Eight^h^h^h^h^h Four^h^h^h^h, uh, Three but these guys aren't good at counting, Chartered Accountancy firms is always a dumb idea.

  12. The ultimate weapon…. a universal central bank that cannot devalúe it’s fiat . Those old school economist are scared.

  13. time to destroy the unfair global economic system, even if that means Libra going into public.. cryptocurrency can't be regulated.

  14. The goverment isn't afraid to cryptos. The banks are afraid of cryptos and they're pushing the goverment to anounce so. Because cryptos are going to destroy all of their theater once and for all. Libra is going to disrupt the monetary system? Hope it destorys/obliterates/slaughters it.

  15. What's the point of using a private currency that is pegged to the USD that will have you tracked even worse than by the government, and not use the USD itself?

  16. Lets say libra becomes world currency and everyone is using it through Facebook, imagine if suddenly you’re banned from Facebook then what???

  17. Personally I think this is all overblown, libra is just another version of paypal, but I could be wrong. I think Facebook should focus on the Oculus rift instead.

  18. Wonder whats the point if all the old players are involved. It doesn't see like it would cut down on transaction cost since everyone still wants a cut.

  19. if it's 1:1 to us dollars, then just call it Libra wallet. it's the "currency" term that make facebook going into scrutiny

  20. It’s a tough road but once they win, they’ll have your neural impulses, your opinions, habits and your money. Yay.

  21. This is new money vs old money. We normal people have no way to stop or change anything. We are just manipulated by different groups of rich people at the end of the day.

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