before attracting attention
from legislators. The fact that
Libra is special is clear when,
months before even a limited
launch, it attracted comments
from the financial chiefs of the
G7 nations.SO, WHY ALL THE FUSS?
Because money is power, and
Libra side-steps so much
regulation, and that has
implications. If Libra gets as
big as it plans, it will put a
great deal of power into the
hands of those who control it.
Libra may sound libertarian—
many aspects are—but it has
the potential to be intrusive,
and worse. The prime mover
behind Libra being Facebook
hasn’t helped bring positive
reactions either. The company
has a terrible record on
privacy; only a few months
ago, it was fined a record $5
billion for passing on private
data. The records generated
by Libra will be kept by
Calibra, and can’t be shared
with Facebook’s servers
without authorization using an
opt-in system. However, there
are plans for a friend-finder
search function, which does
require the linking of Calibra
transactions with Facebookaccounts. The trick, it seems, is
to get users to give permission
to share information, through
incitements of some sort.
Collecting data is what
Facebook does, and Libra will
be part of that process.
Your financial records are
a goldmine for advertisers.
Can we trust Facebook not
to exploit them? In surveys,
Facebook does not score well
at all. A recent one by NBC and
the Wall Street Journal had 60
percent of people not trustingFacebook with personal
data, more than twice the
figure for Amazon. We may
not trust Facebook, but we
haven’t stopped using it. That
financial data isn’t just a juicy
target for business, either—
security forces would be very
interested, too.
The advent of Libra
has drawn a great deal of
attention from US Congress,too. Banking is a heavily
regulated industry, while tech
companies have generally
received a light touch. That
looks set to change. Facebook
has moved into different
waters here. In July, the
Banking Committee held
hearings and questioned the
head of the Libra project, David
Marcus, for two days. It wasn’t
the friendliest of meetings.
The Senator for Ohio said that
the company showed “breath-
taking arrogance,” and thatLibra was “a recipe for more
corporate power over markets
and consumers.” Facebook
denies that it is a bank, and
therefore is free from bank
regulations. Which is just as
well, because one committee
member said, “If you’re a
bank, we (will) regulate the
heck out of you.”
There is not a lot of love
for Facebook on CapitolHill. It has, as yet, failed to
give concrete answers on
how it will implement anti-
money laundering measures.
Basing the organization
in Switzerland has drawn
heavy fire, too (see “The
Libra Organization” box.) Mr.
Marcus claims the location
was chosen to give Libra an
“international place,” not to
skirt regulations. Facebook
has also said it won’t launch
Libra before the regulatory
issues have been resolved.IT’S NOT JUST IN AMERICA
that Libra faces problems.
The French financial minister,
the governor of the Bank of
England, and the Swiss Data
Protection Commissioner
have all issued statements
that warn of the need for
regulation. Many countries
have laws banning or limiting
the use of cryptocurrencies;
one huge market Libra was
hoping to hit early was India,
where such laws have blocked
its launch for now.
The potential for criminal
use is another frequently
raised concern. There are
tight banking regulations to
stop money laundering—what
does Libra have? Promises—Look—you can send money
while on the back of a bike.
A cheesy, but slick, promo
video stresses Libra’s
simplicity and global nature.©^
LIB
RA
PR
OM
OT
ION
AL
VI
DE
O
The Calibra wallet app links into WhatsApp and Messenger.maximumpc.com OCT 2019 MAXIMUMPC 47