As we all know, Facebook’s cryptocurrency plans are well underway. The project has some people excited, while others are trembling with fear.
Facebook Opens the Door to Worry and Anxiety
Among those concerned about the project is Facebook co-founder Chris Hughes, who seems to think that Libra will do more harm than good. In a recent interview, Hughes states that Libra is likely to bring already struggling economies to their knees and destabilize their financial infrastructures.
If even modestly successful, Libra would hand over much of the control of monetary policy from central banks to private companies, which also include Visa, Uber and Vodafone… This currency would insert a powerful new corporate layer of monetary control between central banks and individuals. Inevitably, these companies will put their private interests – profits and influence – ahead of public ones.
Hughes’ big problem with Libra is the fact that it’s a Facebook-based project. He says executives have been smart to tell the public that Libra will be focused on both privacy and limited power, but that the currency will still be a division of Facebook, which is a company that seems hellbent on ruling the world.
One section of the Libra whitepaper mentions the following:
Despite [economic] progress, large swaths of the world’s population are still left behind. 1.7 billion adults globally remain outside of the financial system with no access to a traditional bank, even though one billion have a mobile phone and nearly half a billion have internet access.
Per Hughes’ words, Libra is coming off like the “savior” of developing nations. Many of these countries’ citizens do not have valid access to credit, checking accounts or other traditional financial tools needed to survive or provide for their families. Per the whitepaper, Libra acts as though it’s seeking to bring financial independence back to these people – a common goal of most cryptocurrencies.
The problem, however, is that at the center of the project is Facebook, a company that previously held ties to Cambridge Analytica and has sought to profit from users’ private data. In addition, if private companies are going to have control as Hughes suggests, it could only be a matter of time before greed gets in the way of the coin’s previously stated ideals.
Some Contradictory Data?
An official spokesperson of Libra issued the following statement:
Libra will launch globally. However, it’s important to note that Libra will be distributed by exchanges, wallet services and other trading platforms that will not be able to do business in the few countries where cryptocurrencies are illegal.
These words suggest that the coin is less centralized than it is. It also suggests that the coin is tradeable, though Facebook has made it clear Libra is designed specifically as a means of payment through WhatsApp and merchant sites offering Facebook login options.