Weekending 28th September 2019
If you want one article, read this
Is Facebook’s digital currency un-stoppable?
Is it already too late to stop Facebook and its digital currency, Libra?
Facebook reported, in its Q1 2019 press release, that it now has 2.38 billion monthly users across its various apps — Messenger, WhatsApp, Instagram and Facebook, with 2.4 billion people using one of these apps every day. This is a rise of 8% over the last yearin which Facebook had 1.56 billion logging on EVERY DAY (itself being also an increase in the last year of 8%).
As the Chinese Crypto Czar pointed out,“That the most a central bank could do to prevent Libra from entering a country would be to ask all of their payment institutions and commercial banks not to process any transactions which are related to Libra. Still, there are a few back channels through which users could circumvent the ban to purchase Libra, look at underground Bitcoin trading in China as an example of how it could work”.
Indeed, look at the success the Americans had (or not!) when they introduced prohibition in 1920, as by 1925, in New York alone, there were over 100,000 illegal bars. Not only was there a huge loss in revenue from the tax on ‘booze’ not being levied and collected, but there were 1,500 federal agents who had to be paid and whom were meant to enforce prohibition. Then, there was all the loss of life and social unrest from gangsters, such as Al Capone, who roamed the streets in the USA. In many ways we have similarities now as, on a global basis, the fight against drugs is estimated to be costing over $100 billion p.a.
Michael Corleone in The Godfather Part II said,”…keep your friends close, keep your enemies closer”. Maybe rather than fight Libra, governments need to look, listen and learn.
Christian Legarde (former Managing Director of the International Monetary Fund) said in a speech in Singapore earlier this year, “A new wind is blowing, that of digitalization. In this new world, we meet anywhere, any time. The town square is back — virtually, on our smartphones. We exchange information, services, even emojis, instantly… peer to peer, person to person. We float through a world of information, where data is the “new gold” — despite growing concerns over privacy, and cyber-security. A world in which millennials are reinventing how our economy works, phone in hand”.