Facebook’s new ‘currency’ gets roundly savaged.
Libra is the name that Facebook has chosen for its new digital currency. In Latin ‘libra’ means ‘balance’; in ancient Rome a libra was a measurement of weight, equivalent to 12 ounces. Hence libra also came to mean ‘pound’. But if Facebook was hoping for a balanced response to the announcement of Libra, it will have been disappointed. From regulatory authorities to techie nerds, Libra has come in for a bashing.
From The Atlantic came this, by Eric Posner, professor at the law faculty at the University of Chicago: “The technological innovation that is supposed to liberate us from government ends up subjugating us to a handful of corporations.” Overtones of a private sector Big Brother litter Posner’s warnings about Libra, such as this: “Money is information: When I send money to you, I’m telling the financial system that wealth holdings assigned to me should now be recorded as assigned to you.”
Randal Quarles, chairman of the Financial Stability Board, has sent a letter to G20 national leaders, prior to their meeting in Osaka, Japan, in which he says (prompted no doubt by Libra) that “a wider use of new types of crypto-assets for retail payment purposes would warrant close scrutiny by authorities to ensure that they are subject to high standards of regulation.” Mark Carney, governor of the Bank of England, says that the Bank “approaches Libra with an open mind but not an open door”, which is governor-speak for ‘we need to keep a very close eye on this threat’.
And on techcrunch Josh Constine is worried about privacy, control and security: “Apparently Facebook has already forgotten how allowing anyone to build on the Facebook app platform and its low barriers to ‘innovation’ are exactly what opened the door for Cambridge Analytica to hijack 87 million people’s personal data and use it for political ad targeting.” Sherrod Brown, a US Democrat Senator, was blunt in his tweet: “We cannot allow Facebook to run a risky new cryptocurrency out of a Swiss bank account without oversight.”
We could go on but you get the picture – lots of worries and no-one has even got their hands on a Libra as yet.
Here at Glint we need no such warnings about the shift of control of paper money from central banks, to control over digital money by massive global private sector corporations. We are well aware of the rapidity of change that is superseding money markets. That’s why we espouse gold as the only true currency, which is beyond the control of either governments or corporations. Gold transcends that fight for ownership and control – which makes it unique.
This swiftly-moving and global context for finance will inevitably mean some winners and losers. At the Bank of England an unnecessarily lengthy (148 pages) paper on the “Future of Finance” tries to second guess what the technological, demographic and environmental changes happening in the UK (and elsewhere) will mean for the Bank’s supervision and control of the economy. Bureaucracies such as the Bank of England are likely to be losers in this revolution; much richer and agile private sector giants like Facebook will always stride ahead faster. The Bank is always playing catch-up. It seems paralysed in the face of a crashing collapse in the availability of ATMs in the UK, for example: some reports suggest that the UK lost 460 such machines each month in 2018.
It’s a volatile place right now, the financial world, as geo-political tensions coincide with technological innovations. How to gain stability amid turmoil? Download the Glint App now, or visit Glint’s website, to see how gold can bring you certainty.