(ThyBlackMan.com) Facebook, the social network, announced on Jan. 30, 2018, that it would ban all ads for Bitcoin and other cryptocurrencies in order to stop promotions that it sees as “frequently associated with misleading or deceptive promotional practices.”
But, as the New York Times reported about this story, “Mark Zuckerberg, Facebook’s chief executive, has recently expressed an interest in digital currencies … studying how to introduce cryptocurrency to his company.”
Zuckerberg said that cryptocurrency would “take power from centralized systems and put it back into people’s hands.”
Eighteen months later, on June 18, Facebook planned to issue a White Paper unveiling details of its own cryptocurrency, to be known as GlobalCoin or after Facebook’s secret project Libra.
Facebook, which plans to launch the Libra cryptocurrency early next year, already has more than a dozen partners. The Wall Street Journal names Visa Inc.; Mastercard Inc.; PayPal Holdings Inc.; Uber Technologies Inc.; financial-technology firm Stripe Inc.; travel-reservation site Booking.com; and Argentina-based e-commerce site Mercado-Libre Inc. (“free market” in Spanish).
Each project contributor is to invest roughly $10 million in a consortium that will govern the Libra coin. Unlike wildly speculative cryptocurrencies such as Bitcoin, the Libra will be a “stablecoin” whose value is reliably pegged to a “basket`” of various government paper fiat currencies, as well as low-risk stocks, and perhaps even gold to provide the new coin counter-cyclic insurance.
Facebook reportedly will help establish a reserve fund worth more than $1 billion to back the Libra coin, much as national banks such as the Federal Reserve do.
Can Facebook, a widely-distrusted private company, acting somewhat like a central bank, create a reliable currency that people will trust? Facebook every month has almost 2.4 billion customers (even after purging 2.19 billion fake accounts earlier this year) using at least one of its three owned web platforms – Facebook, Messenger and WhatsApp. On the day it launches, Libra will have a larger customer base than most of the world’s central banks. This could be the entire population of every nation south of Earth’s equator plus India – one-third of humankind.
Facebook emphatically says that the Libra consortium, not it, will make Libra coin decisions. This helps Mark Zuckerberg in a world where government regulators have choked previous cryptocurrencies, whose users often sought privacy, secret transactions and a kind of currency that helped drug dealers and tax evaders.
Because the Libra coin will be openly trackable and taxable by government, and will offer no more privacy than Facebook grants its other customers, critics say it should not even be called cryptocurrency.
Because its value is tied to debased paper government fiat currency, Libra barely offers the “choice of currencies” that Nobel Laureate economist Friedrich A. Hayek wanted people to have.
Government regulators have little reason to fear or oppose Libra, the theory goes. But wealth-stealing politicians are eager to loot Facebook, one of the world’s richest companies. Zuckerberg has set aside many billions of dollars just to pay off “regulatory violations” to extortionate governments.
By scattering the responsibility for this new cryptocurrency among many companies, Facebook hopes to keep itself out of the center ring of tax and shakedown targeting by greedy politicians.
What gains does the Libra cryptocurrency give Facebook, which will have the largest voice in shaping the new coin? Libra transactions could cost Facebook users almost nothing, which means that Libra can immediately undercut the fat fees and profits of credit card companies. Because of Libra’s synergies, this global currency could afford to pay customers more than banks do – and offer generous discounts on merchandise bought using Libra from Facebook advertisers, who will pay lower fees. Last March, Barclays analyst Ross Sandler estimated that Facebook by 2021 could be making up to an additional $19 billion in revenue from diversifying into trading crypto online and cryptocurrency transactions.
Libra could quickly become widely used money in many Third World nations, where banking is unreliable, corrupt, expensive or difficult to use. This means that Libra joins Russia and China in undermining America’s lucrative “exorbitant privilege” as printer of the U.S. dollar, the world’s reserve currency, as well as speeding the “cashless society.”
Mark Zuckerberg could expand from being only the world’s leading left-leaning free speech censor to one of the world’s most powerful bankers, which could make him emperor on a par with China’s “social credit” conformist dictatorship.
Why name it Libra? Rivals Cameron and Tyler Winklevoss’ company is another astrological sign, Gemini. Libra resembles LIBOR, the London Inter-bank Offered Rate. And the world’s most famous Libra is Russian leader Vladimir Putin.
Written by Lowell Ponte
