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Libra (Facebook crypto)

  • 07-06-2019 1:21pm
    #1
    Banned (with Prison Access) Posts: 186 ✭✭ Kickstart1.3
    Banned


    Facebook are releasing their own Crypto. There's not much info out there at the moment but more information is to be released on June 18th.
    Will folks invest in it? And could it be the first Crypto-currency to gain mass market adaptation?

    Libra

    Will you invest in Libra coin? 33 votes

    Yes
    84% 28 votes
    No
    6% 2 votes
    I'll wait and see first..
    9% 3 votes


Comments

  • Registered Users Posts: 6,026 ✭✭✭ grindle
    Registered User


    It's gonna be a stablecoin - where's the investment?

    If you think it'll be a huge success, buy shares in FB.


  • Banned (with Prison Access) Posts: 186 ✭✭ Kickstart1.3
    Banned


    I think it will be big, as in it could grab a large market share of what a lot of the Altcoins are trying to do. If its a stablecoin then you are right it would be better to buy fb shares instead.


  • Registered Users Posts: 6,814 ✭✭✭ Grumpypants
    Registered User


    I'm sure the goal for Facebook is having people use this coin to buy stuff from retailers who advertise on Facebook. They complete the retail loop then and get a tiny cut of Facebook coin for doing it. That tiny cut done a billizion times is a nice chuck of change. If their coin remains stable and can be a currency in that manner then that's how they make their money rather than speculating with it.


  • Registered Users Posts: 10,905 ✭✭✭✭ Bob24
    Registered User


    grindle wrote: »
    It's gonna be a stablecoin - where's the investment?

    If you think it'll be a huge success, buy shares in FB.

    With what is now know about it, while there could be a semantics argument about calling this investment or not I do see a case for people buying and holding it.

    If there is a strong mechanism to to guarantee an effective conversion rate based on a basket of currencies and obligations, this could be attractive to people looking for a stable way to store some of their wealth.

    Obvious exemple would be Venezuela type of situation: if your national currency is in free fall you can be tempted to transiger a good chuck of your wealth to an easily accessible digital asset which is pegged to leading world currencies.

    And while the appeal is not as strong, even someone in Ireland could see a point in doing this: rather than keeping all their cash in the bank in euros, it could be attractive to hold part of it in a very liquid asset which limits euro exposure as other currencies are brought into the mix (that person could want to plan for a potential eurozone collapse or simply get some protection in case the euro depreciates more than other leading currencies).

    I know technically you could already look into indexed funds providing similar garantes, but the percentage of the global population which has easy access to them is tiny.


  • Registered Users Posts: 1,101 ✭✭✭ Mrs Gilhooley
    Registered User


    Good post.

    And it would plead the investors (visa, Uber, Vodafone et al) if people did invest their cash in it in that manner due to interest earned.

    While the interest will initially go to the NPO to cover costs and further research, the residual will go to the early investors.


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  • Registered Users Posts: 1,101 ✭✭✭ Mrs Gilhooley
    Registered User


    What I think will be really interesting to see is the various regulatory regimes this initiative could fall under, which could vary from country to country in the EU alone due to legislative nuances.

    The purchase of a Libra token mimics purchasing a share in an investment vehicle as you are buying a token is reflected in a basket of fiat currencies. The value of your token may go up or down relative to the currency from which you bought it.

    Will it therefore fall under the definition of a retail investment and will a prospectus and heavy regulatory oversight then be required?
    It certainly doesn't appear to be a bank and there is then no deposit protection scheme so the retail investor could be subject to more risk (it could be argued even if the indexing of fiat currencies should absorb any massive shocks).


  • Banned (with Prison Access) Posts: 186 ✭✭ Kickstart1.3
    Banned


    I ended up buying some more fb shares, I was already invested in them but this will bring a lot more growth to the fb ecosystem. They are trying to be the Wechat /Alipay of the western world. If they succeed which I think they will then I'm of the opinion now that libra will do what all those Altcoins are promising. Its a big kick in the gut for the likes of the lightning network which is forever the next big thing. The likes of Bitcoin cash, litecoin and similar payment cryptos are starting to look dated and beat now


  • Closed Accounts Posts: 4,791 JJJJNR


    What I think will be really interesting to see is the various regulatory regimes this initiative could fall under, which could vary from country to country in the EU alone due to legislative nuances.

    The purchase of a Libra token mimics purchasing a share in an investment vehicle as you are buying a token is reflected in a basket of fiat currencies. The value of your token may go up or down relative to the currency from which you bought it.

    Will it therefore fall under the definition of a retail investment and will a prospectus and heavy regulatory oversight then be required?
    It certainly doesn't appear to be a bank and there is then no deposit protection scheme so the retail investor could be subject to more risk (it could be argued even if the indexing of fiat currencies should absorb any massive shocks).

    In countries using crypto, I've read that you need to use it within a certain timeframe otherwise it's look on as an asset.


  • Registered Users Posts: 10,905 ✭✭✭✭ Bob24
    Registered User


    The purchase of a Libra token mimics purchasing a share in an investment vehicle as you are buying a token is reflected in a basket of fiat currencies. The value of your token may go up or down relative to the currency from which you bought it.

    Will it therefore fall under the definition of a retail investment and will a prospectus and heavy regulatory oversight then be required?

    It is a good question. For now I think as this is pretty unclear as regulators and governments haven’t gotten their heads around it, but from a text perspective I don’t see why a Libra token should be treated differently from an ETF tracking a basket of currencies - i.e. subject to capital gain tax. Having said that if you never convert your Libras back into euros and just either hold them or use them to purchase things priced in Libra and not in euros (i.e. no conversion required), I am not sure you’d ever trigger CGT.


  • Registered Users Posts: 10,905 ✭✭✭✭ Bob24
    Registered User


    Looks like Facebook partners are seriously starting to lose confidence: https://cointelegraph.com/news/paypal-may-ditch-facebooks-libra-over-regulatory-scrutiny-report


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  • Registered Users Posts: 4,655 ✭✭✭ makeorbrake
    Registered User


    Bob24 wrote: »
    Looks like Facebook partners are seriously starting to lose confidence: https://cointelegraph.com/news/paypal-may-ditch-facebooks-libra-over-regulatory-scrutiny-report

    Not sure what paypal's thinking is - but all of this has been a positive for crypto. It's brought it front and center. Whats more, if the yanks don't do anything, they're going to lose out to china - who are far more advanced in terms of payment systems right now (and about to launch their own digital currency).


    Of course, I don't particularly want these to succeed - but i think they will help in the journey towards decentralised (REAL!) crypto.


  • Registered Users Posts: 10,905 ✭✭✭✭ Bob24
    Registered User


    Not sure what paypal's thinking is - but all of this has been a positive for crypto. It's brought it front and center. Whats more, if the yanks don't do anything, they're going to lose out to china - who are far more advanced in terms of payment systems right now (and about to launch their own digital currency).


    Of course, I don't particularly want these to succeed - but i think they will help in the journey towards decentralised (REAL!) crypto.

    I think PayPal (and others) are starting to think that the risk to reward ratio is much higher than they initially thought. Of course if it all goes well it will be good for them to be part of this. But if it goes badly and ends up on the wrong side of regulation and politics, being associated with it could actually have a material impact on their core business and their relationship with regulators.
    Facebook doesn’t care as much as it is a new business for them and a failure wouldn’t affect their existing core business, but I can see how a payment processor like PayPal doesn’t want to take the chance of ending up associated with something which is fought against and possibly legally challenged by every financial regulator and finance minister on this planet.

    But yeah, agree that on the other hand potential Chinese competition is a reason for US authorities to let loose in order to have an American company control whichever global and institutional digital money might emerge rather than it being controlled by the Chinese.


  • Registered Users Posts: 10,905 ✭✭✭✭ Bob24
    Registered User


    Facebook is now trying to sell Libra as the to avoid “having a whole part of the world completely blocked from U.S. sanctions and protected from U.S. sanctions”: https://www.coindesk.com/facebooks-marcus-says-china-wins-with-digital-renminbi-if-u-s-nixes-libra

    Seems like a double edged sword. Although it is a very questionable statement, it might go well with some US leaders - but now they have to work out how to convince the rest of the world which isn’t especially pleased with dollar weaponisation and would be happy to insulate itself from US financial attacks (including US allies against which US financial extraterritorial legislation is used regularly).


  • Registered Users Posts: 4,655 ✭✭✭ makeorbrake
    Registered User


    Bob24 wrote: »
    Facebook is now trying to sell Libra as the to avoid “having a whole part of the world completely blocked from U.S. sanctions and protected from U.S. sanctions”: https://www.coindesk.com/facebooks-marcus-says-china-wins-with-digital-renminbi-if-u-s-nixes-libra

    Seems like a double edged sword. Although it is a very questionable statement, it might go well with some US leaders - but now they have to work out how to convince the rest of the world which isn’t especially pleased with dollar weaponisation and would be happy to insulate itself from US financial attacks (including US allies against which US financial extraterritorial legislation is used regularly).

    From a US perspective, they definitely have a point insofar as if they don't get their act together and set positive go-forward regulation, they're going to lose out to China.
    The sanctions thing - I'd imagine that battle is going to be lost anyway - they won't be able to hold back the means of transfer. Whether its government digital currency, decentralised or corporate, there are options to body-swerve the banking system that the americans had a choke hold over.

    I think at some point, facebook will get its way - or some corporate digital money project will.


  • Registered Users Posts: 10,905 ✭✭✭✭ Bob24
    Registered User


    From a US perspective, they definitely have a point insofar as if they don't get their act together and set positive go-forward regulation, they're going to lose out to China.
    The sanctions thing - I'd imagine that battle is going to be lost anyway - they won't be able to hold back the means of transfer. Whether its government digital currency, decentralised or corporate, there are options to body-swerve the banking system that the americans had a choke hold over.

    I think at some point, facebook will get its way - or some corporate digital money project will.

    Yes, what is right is pointing at the fact that the US is going to lose USD-related leverage. Now IMO presenting Libra as the solution to this is a bit of a stretch. Arguably if this is the concern, a digital USD issued by the fed would be a better tool than Libra.

    Also regardless of what China does with a digital RMB, I think de-dollarisation is happening and unstoppable anyway: Russia has massively dropped its USD reserves, China is in the process of doing the same thing, many central banks are stockpiling gold, and even UK and Dutch central banks are publicly questioning the status of the USD and making noise about gold being the glue of the global financial system. So while of course I understand Marcus is just doing a marketing talk here to push the interest of his employer, the way he is framing the problem as a Libra vs digital RMB competition is very restrictive.

    And if the message Facebook is saying to countries which are de-dollarising is that Libra will counter that process and make it useless, Libra is also going to be a hard sale with those countries!


  • Registered Users Posts: 4,655 ✭✭✭ makeorbrake
    Registered User


    Bob24 wrote: »
    Yes, what is right is pointing at the fact that the US is going to lose USD-related leverage. Now IMO presenting Libra as the solution to this is a bit of a stretch. Arguably if this is the concern, a digital USDs issued by the fed would be a better tool than Libra.

    I'd imagine the argument is that they're in a better position to get it out there. They're further down the road and they have the resources to get it out there fast.


  • Registered Users Posts: 10,905 ✭✭✭✭ Bob24
    Registered User


    I'd imagine the argument is that they're in a better position to get it out there. They're further down the road and they have the resources to get it out there fast.

    True but there is a massive caveat from the perspective of the US: a Fed issued digital USD would be 100% aligned with the US interest and controlled by US authorities. While Libra would be controlled by Facebook and first and for most aligned to the company’s interest (of course US authorities have powerful ways to pressure Facebook, but it is not the same as full control and Facebook would also be subject to pressure from other nations.


  • Registered Users Posts: 4,655 ✭✭✭ makeorbrake
    Registered User


    Bob24 wrote: »
    True but there is a massive caveat from the perspective of the US: a Fed issued digital USD would be 100% aligned with the US interest and controlled by US authorities. While Libra would be controlled by Facebook and first and for most aligned to the company’s interest (of course US authorities have powerful ways to pressure Facebook, but it is not the same as full control and Facebook would also be subject to pressure from other nations.
    Perhaps. I hate facebook as an organisation as much as the next man but I suspect any of the tech giants will freely collaborate with US authorities behind the scenes.


  • Registered Users Posts: 10,905 ✭✭✭✭ Bob24
    Registered User


    Perhaps. I hate facebook as an organisation as much as the next man but I suspect any of the tech giants will freely collaborate with US authorities behind the scenes.

    Yes agreed they will take instructions behind closed doors, but it can’t be as bold as what a government entity would do: they will still need to protect their own interest and not make this influence too obvious, as well as protecting their relationship with authorities in other countries.

    To summarise it: if the US are weaponising the dollar and another country complains about it, the US just ignores that complaint and gets away with it. But if Facebook was to weaponise Libra at the request of the US government and some countries were to be unhappy about it, they could fine Facebook, cause the company or its staff legal troubles, or even ban its activity in the country (not to mention the damage in those countries in terms of FB’s reputation with their users if they are seen as a proxy of the US to economically assault their country).

    And to clarify, I definitely agree that a successful Libra would be better than nothing from the point of view of the US. But I don’t think it is an optimal solution and I do think it still means reduced influence compared to what they have now (IMO if circumstances were to make it lead to equal or stronger influence, several countries would outlaw it anyway, which would be easier than outlawing the USD).


  • Registered Users Posts: 4,655 ✭✭✭ makeorbrake
    Registered User


    Bob24 wrote: »
    They will still need to protect their own interest and not make this influence too obvious, as well as protecting their relationship with authorities in other countries.
    Isn't Facebook a far better guise to do that? It's a US concern but with tentacles all over the world and 2.7 billion users. If Fed Coin is released tomorrow, won't it be much more difficult to achieve uptake outside the united states?
    Bob24 wrote: »
    To summarise it: if the US are weaponising the dollar and another country complains about it, the US just ignores that complaint and gets away with it.

    Well, the dollar was 'weaponised' (and/or used strategically) a long long time ago. The dollar as the global reserve currency has been one of the central factors in the overall economic success of the US for many years.
    Its hard to see in the long run how they can maintain that.

    The other aspect has been banking. You'll recall many months ago, the US diverged from its EU partners in terms of the sanctions on Iran. Although SWIFT is Belgium based, it bended the knee to the yanks and complied with them in locking Iran out of international banking. Well, the europeans were none too happy with that. The chinese and russians as you've already identified are not happy with that. Iran, venezuela, north korea - they're all not happy with sanctions and are all tinkering with digital currency to greater and to lesser extents.
    And I could mention the unmentionable (kyc/aml) as another weapon the US has been using but I better not!

    I suppose if they get their own digital currencies in play then they can set the agenda as regards regulation - and those aligned with them (most jurisidictions) fall in behind. That can happen if it's facebook/libra or a US FedCoin.

    The Chinese are ever the coming force - so they'll be doing their own thing come what may I would imagine. The europeans and yanks may tease out a deal. But of course, there's also a data privacy angle here...that's one of the things facebook are after.


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  • Registered Users Posts: 10,905 ✭✭✭✭ Bob24
    Registered User


    Isn't Facebook a far better guise to do that? It's a US concern but with tentacles all over the world and 2.7 billion users. If Fed Coin is released tomorrow, won't it be much more difficult to achieve uptake outside the united states?

    Libra would possibly get better uptake with consumers, but this isn’t necessarily the concern - when the US want to apply “sanctions” it is more related to financial transaction between countries or between mostly large companies. Those would actually quite possibly be more inclined to used a Fed issues USD coin than Libra. So it’s just my view but I think full control rather that weaker influencing capabilities is more important from a US perspective e than wider consumer adoption.


  • Registered Users Posts: 4,655 ✭✭✭ makeorbrake
    Registered User


    Bob24 wrote: »
    Libra would possibly get better uptake with consumers, but this isn’t necessarily the concern - when the US want to apply “sanctions” it is more related to financial transaction between countries or between mostly large companies. Those would actually quite possibly be more inclined to used a Fed issues USD coin than Libra. So it’s just my view but I think full control rather that weaker influencing capabilities is more important from a US perspective e than wider consumer adoption.

    True enough.


  • Registered Users Posts: 300 ✭✭ Speculator
    Registered User


    I was considering it, however I went all in on Tether, wish me luck.


  • Registered Users Posts: 1,101 ✭✭✭ Mrs Gilhooley
    Registered User


    Speculator wrote: »
    I was considering it, however I went all in on Tether, wish me luck.

    Sounds like you were thinking of it like an investment, which is what it is trying very hard not to be. So, while you will hardly have lost money, you'll hardly have made any either


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