Opinion Warning! Facebook co-founder warns against Libra cryptocurrency | Technology | The Guardian
(theguardian.com)
Chris Hughes says firms involved such as Paypal and Mastercard will wield too much power
Rob Davies @ByRobDavies
Facebook co-founder Chris Hughes warns that the social media giant has already had a huge and unintended, sometimes negative, effect on other walks of life. Photograph: Chesnot/Getty Images
One of Facebook’s co-founders has warned that the social network’s plans for a digital currency called Libra could allow corporations involved in the scheme to wield power over nation states.
Chris Hughes, whose role in the early days of Facebook has given him a net worth estimated at $430m (£340m), said global regulators should intervene to slow the progress of the cryptocurrency.
Facebook is developing Libra from a base in Switzerland, in partnership with 27 other corporations, including Mastercard, Paypal, Uber and Vodafone, collectively known as the Libra Association. Quick guide
What is Libra, Facebook's new cryptocurrency?
Show“If even modestly successful, Libra would hand over much of the control of monetary policy from central banks to these private companies […],” said Hughes, co-chairman of anti-poverty campaign group the Economic Security Project.
“If global regulators don’t act now, it could very soon be too late.”Mark Carney, governor of the Bank of England, offered a cautious welcome to Libra in his speech at the annual Mansion House dinner on Thursday night.
But in an article for the Financial Times, Hughes warned that the companies involved in the Libra Association, who have put $10m each into the project, would be able to “disrupt and weaken” nation states.
He warned that if enough people in emerging economies traded local currency for Libra, it would threaten governments’ ability to manage their own fiscal policy. Emerging governments should place a temporary ban on local banks and payment processors accepting the currency until the implications are thought through, he said.“
What Libra backers are calling ‘decentralisation’ is in truth a shift of power from developing world central banks toward multinational corporations and the US Federal Reserve and the European Central Bank,” said Hughes.
He added that if Libra is successful, Facebook and its partners would hold undue sway over the development of crucial global technology such as identify verification, as well as effectively writing the rules on matters such as privacy and response to theft.
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Hughes said that anyone believing his fears were overblown should consider how Facebook has had a huge, sometimes negative, effect on other walks of life.
“The company’s decision to offer live broadcasting made it possible for teenagers to stream bullying, terrorists to live-cast an execution and a gunman a mass shooting,” he said.
“It has similarly transformed mobile messaging and news and journalism faster than many imagined.”The Guardian has approached Facebook for comment.
Rob Davies @ByRobDavies
Facebook co-founder Chris Hughes warns that the social media giant has already had a huge and unintended, sometimes negative, effect on other walks of life. Photograph: Chesnot/Getty Images
One of Facebook’s co-founders has warned that the social network’s plans for a digital currency called Libra could allow corporations involved in the scheme to wield power over nation states.
Chris Hughes, whose role in the early days of Facebook has given him a net worth estimated at $430m (£340m), said global regulators should intervene to slow the progress of the cryptocurrency.
Facebook is developing Libra from a base in Switzerland, in partnership with 27 other corporations, including Mastercard, Paypal, Uber and Vodafone, collectively known as the Libra Association. Quick guide
What is Libra, Facebook's new cryptocurrency?
Show“If even modestly successful, Libra would hand over much of the control of monetary policy from central banks to these private companies […],” said Hughes, co-chairman of anti-poverty campaign group the Economic Security Project.
“If global regulators don’t act now, it could very soon be too late.”Mark Carney, governor of the Bank of England, offered a cautious welcome to Libra in his speech at the annual Mansion House dinner on Thursday night.
Alarming and unnecessary: Facebook’s new cryptocurrency must be resisted
But in an article for the Financial Times, Hughes warned that the companies involved in the Libra Association, who have put $10m each into the project, would be able to “disrupt and weaken” nation states.
He warned that if enough people in emerging economies traded local currency for Libra, it would threaten governments’ ability to manage their own fiscal policy. Emerging governments should place a temporary ban on local banks and payment processors accepting the currency until the implications are thought through, he said.“
What Libra backers are calling ‘decentralisation’ is in truth a shift of power from developing world central banks toward multinational corporations and the US Federal Reserve and the European Central Bank,” said Hughes.
He added that if Libra is successful, Facebook and its partners would hold undue sway over the development of crucial global technology such as identify verification, as well as effectively writing the rules on matters such as privacy and response to theft.
Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk
Hughes said that anyone believing his fears were overblown should consider how Facebook has had a huge, sometimes negative, effect on other walks of life.
“The company’s decision to offer live broadcasting made it possible for teenagers to stream bullying, terrorists to live-cast an execution and a gunman a mass shooting,” he said.
“It has similarly transformed mobile messaging and news and journalism faster than many imagined.”The Guardian has approached Facebook for comment.
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Francisco Gimeno - BC Analyst Libra is, at least, complying with one of the mantra words of the 4th IR: disruption. But its disruption is more chaotic than there thing. A coin which we believe is not real crypto, a corporation trying to dominate most of global finance... we will see what happens in 2020. It will probably change a lot, there will be a strong regulatory effort on the side of governments and, if it launches, will work for remittances and purchasing, like MPesa in Africa, with global reach. Never as a real crypto.