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)

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

  1. shut down you facebook profile now or libra will empty not only everyone's account but american treasury with them

  2. Crypto currencies can't be trusted and neither are they just, clear and interest-free especially if runned by greedy corporate powers.

  3. 'Just imagine a company being able to combine your identity, your online habit and your spending pattern.' Are you talking about Tencent and Alibaba?

  4. For better and safer future, tech giants like facebook needs to be broken down into smaller ones or they will be our dictators

  5. Facebook can always be raided and CEOs held for treason and executed like they should be. Always that option. Bolsheviks too

  6. The interesting thing to observe here is one evil entity is stopping other evil entity for their evil benefit. No one cares that group of corporate companies join together to print their own money and sell it to others. But when they starts to affect other regulators and banking industry they just go crazy. It looks like two wrong can make one right

  7. Saddam Hussein and Muammar Gaddafi challenged the Petrol Dollar. Look at how they end up. Zuck will be next if he don't be careful

  8. "Just imagine a company being able to combine your identity, your online habits and your spending patterns." FANG is like laughing like we're already doing that.

  9. Long ago blacksmiths ended up issuing more notes than the value of gold stored in their vaults. What’s to say Facebook won’t end up making 2 or 3 libras for each dollar and still making it worth a dollar ?

  10. Facebook 'we'll keep the spending data separate from the user identities', now let's take a look what happened with the WhatsApp takeover, they were blocked by the EU until FB made a similar statement, the merger was then aloud to go ahead but then 12 months later FB incorporated the WhatsApp data into FBs.

  11. Facebook is the embodiment of Black Mirror. They WILL weaponise the data to lock you out of the economy for wrongthink, like they are doing now with conservatives. I vehemently oppose any of their plans to engulf the personal lives of people. Libra association is a literal oligarchy of private companies that are accountable to no one. They should be broken up.

  12. I don’t want them to make Libra. They don’t need to! The benefits it provides the consume pale in the benefits fsveook can leverage as a result

  13. i dont see differences here with bankers or cryptocurrency, just a player exchange/shift at the top of global money game (if it work out), or may be still same group of ppls but with different method of intervention. Ordinary ppl like me can only follow the wave ….

  14. this is a TERRIBLE IDEA!!!!! I WILL NEVER EVER use any kind of money that is made up by facebook!!! the US dollar is good enough for me.

  15. What do 60 something year old lawmakers know about innovation? Why is a company knowing my online habits and transaction history unprecedented power? What's the worst they could do, show me targeted ads?

  16. I almost threw up when he said China was concerned, than he went on to say it was unprecedented, than I lost it . let me see a company that use your identity, online habits and your spending patterns with the full weight of the government behind them , take a guess , I was so sure he’s taking about Tencent and Alibaba . The only concern a country like China would have is the fact they didn’t think of the idea or the fact their companies don’t have that big of a global presence outside of China . This must be Another Chinese sponsored ads

  17. The explanation on the reserve in this video is somewhat misleading. It's not as simple as 1:1 with the USD. Libra is backed by a collection of
    low-volatility assets, like bank deposits and short-term government securities in currencies from stable and reputable central banks (dollar, euro, yen, etc.). So it isn't actually a "peg" to any one currency.

  18. its actually really funny watching the big corporations and banks try to create their own cryptocurrencies. digital yuan or digital dollar makes sense from a functional standpoint, it will exist no matter what eventually. But why would you buy that from facebook lol?

  19. Fake Money can easily be created and destroyed . Why would you tie it to the dollar . The same thing the government controllers and manipulates. What is the point of this creating Libra . So you can give the government another backdoor .

  20. LIBRA ♎️ PLEASE MAKE IT HAPPEN FOR AFRICANS SAKES ✊🏾✊🏾✊🏾. NO TO STUPID AFRICAN CURRENCIES AND FRANCE IS AFRAID OF ITS MONETARY AGREEMENT WITH ITS SLAVE AFRICAN COUNTRIES! GUESS WHAT WESTERN NATIONS UNION IF YOU DONT CREATE IT FOR SOCIETY THE CHINESE WILL AND ARE MORE THAN CAPABLE. let’s face it the world needs these new fluid money💰✌🏾✌🏾🤞🏾🤜🏾👏🏾🤘🏾🙌🏾.

  21. Don't let corporations control our money. It's hard enough with government regulators already, we don't need to add another large player on the financial markets.

    Also Facebook cannot be trusted. There's no way they're going to effectively separate spending and personal data.

  22. At least the federal reserve is predictable, I don't want Facebook controlling the money supply. The only acceptable digital currency that I would support is a decentralized one like Bitcoin, that no one can tamper with, control, or keep tabs on. The act of pegging the value of a digital currency to the US dollar is troubling in itself because it means that it has no purpose other than to transfer control over the money supply to another entity. Crypto is meant to be liberating, not a tool for even greater control.

  23. All financial revolutions (like banking and paper money) came from the private sector … I dont trust any of those companies but I would never ever trust goverments aka the same old men either. The only surprising statement came from a man of the Trump team, the rest was all about leftist agenda.

  24. This will be the greatest heist in history. The heist if the banking system in plain sight.

    This will go through, the codebase is already too developed: https://github.com/libra/libra

  25. Look.
    So U.K. consort Elon Musk gets to make crypto currency but
    American entrepreneur
    Mark Zuckerberg doesn't?
    America is under financial attack by U.K. sponsors betraying American citizens.

  26. Why would you want to do this. Some of us who have been shut down for putting real news out there understand how crooked Facebook and this would be. They would become too powerful you would have no safety in your transactions . What they wanted to do with China always makes me question them. No trust .You just do your own research

  27. While i did at one point make a cryptowallet and tried mining (started way to late to get any value though), I didn't really understand it then like i do now. Had i known then, i never would have made the wallet in the first place and i am very glad i never invested real money in it.

    Crypto is gonna go the way of the Dodo because the value of cryptocurrency is not actually in the cryptocurrency, it is in the technology behind it, blockchain which does have useful purposes. Not going to say what they are cause frankly i'm no tech genius but i am never getting on board with cryptocurrency. I'd sooner go back to hard cash than do that.

  28. Would you rather a global digital currency is controlled by Facebook and a bunch of other western companies or by the Chinese state? China already has major political influence in 3/4 of the world.

  29. I cannot understand how a company which is in the marketing business made such a terrible blunder in timing and presentation. Calling it a crypto whilst cryptos were being associated with crooks , speculators and anarchists and announcing it whilst facebook was reeling from its privacy and advert debacles…

  30. In all sincerity, having one currency would be a good thing for globalazation. The fact that pricing for products can be so different on region to region due to different currency values makes international trade complicated. Now I don't want a company doing this for me per say but that being said they already can get all this information with our current financial system.

  31. Facebook is only trying to copy what WeChat already successfully did. The thing is, that model might not be embraced in the west.

  32. They need to investigate him for Nazi ties…. Not only are his names german he's working with crypto currency and swiss banks why they have been trying to address the issue of swiss banks and nazi gold

  33. centralised control of the money system is pure evil….. decentralised autonomous control is the only way…. choose BITCOIN and/or open blockchian cryptos for your internet money!!!! libra is NOT needed!!

  34. Well if libra foundation is seperate with its own members then … I don't think fb could access data without approval from 50% of the members

  35. the question is what the product of libra..only the facebook segmentation..value of cryptocurrency in this day product can be use..at this moment the product make strong value of cypto..first thing must understand whitepaper of libra

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