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Regulators Have Doubts About Facebook Cryptocurrency, and So Do Its Partners

nytimes.com

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Re: Regulators Have Doubts About Facebook Cryptocurrency, and So Do Its Partners

#31

Post by lammalamma25 »

CPLX wrote: post #26
lammalamma25 wrote: post #13

Call me dumb for saying this, but I can go to a casino or chuck e. cheese and trade in USD for chips I use at their location. I could take those chips somewhere else if I wanted to and use them with anyone willing to take them. Why is Libra so upsetting? Isn't it the same thing? It seems to me like criticizing Facebook is just the fashionable response to it right now.

You actually can't. Nevada law is explicit that casino chips are not allowed to be used "for any monetary purpose" and federal law prohibits the creation of currencies. Casino chips are highly regulated and only permitted to be used as a stand in for gambling funds where it is permitted. In real life if a casino doesn't think you got a chip from them directly as part of gaming at that casino they won't pay out on it.…

Well I learned something new today. But I'm meaning there are many examples of business that will take your money and give some other form of "currency." Like if Libra where called a "facebook gift card" would it be a significant different thing. (Joking)

Re: Regulators Have Doubts About Facebook Cryptocurrency, and So Do Its Partners

#32

Post by grenoire »

lammalamma25 wrote: post #29
bongobongo wrote: post #23

Earlier quoted context omitted.

I won’t call you dumb, but you can only stretch an analogy so far. And some weirdos trading pizza arcade tokens like they are real money is not at all the same as one of the richest companies in the world trying to disrupt the global currency market for gain. Since you asked—that’s the difference, that’s what has got people “upset.”

Fair enough. I definitely see the potential downside of them doing this. It seems like people are saying this is bad because of who is doing it though. Not what is being done. I find it a tough spot because I think something like Libra (A nation-less currency) is a really good idea. But it will take some sort of large fiat backing to happen. IMO the decentralized model isn't really working.

It is a situation where the who is the what.

It's the way forward to a dystopian sci-fi trope: Corporate-owned and minted money that transcends national fiat currencies. The implications of which have again been extensively discussed in aforementioned media.

Re: Regulators Have Doubts About Facebook Cryptocurrency, and So Do Its Partners

#33

Post by ilaksh »

Libra is the best way for payment middlemen and governments to combat cryptocurrency -- by creating something that looks like it and provides some convenience, but removes all of the teeth and allows them to continue to control and profit from it.

I am sort of hoping they won't figure that out. But it seems likely that eventually they will.

Maybe I should stop saying it's not a real cryptocurrency and stuff, because perhaps if they think it's real or could turn into a real cryptocurrency then many will be afraid of it and kill the project. And that could give time for Bitcoin and Ethereum scaling efforts to be deployed.

By the way, what are they all planning to do if the scaling efforts of real cryptocurrencies succeed and the dream of digital cash becomes a reality?

Re: Regulators Have Doubts About Facebook Cryptocurrency, and So Do Its Partners

#34

Post by lmm »

CPLX wrote: post #26
lammalamma25 wrote: post #13

Call me dumb for saying this, but I can go to a casino or chuck e. cheese and trade in USD for chips I use at their location. I could take those chips somewhere else if I wanted to and use them with anyone willing to take them. Why is Libra so upsetting? Isn't it the same thing? It seems to me like criticizing Facebook is just the fashionable response to it right now.

You actually can't. Nevada law is explicit that casino chips are not allowed to be used "for any monetary purpose" and federal law prohibits the creation of currencies. Casino chips are highly regulated and only permitted to be used as a stand in for gambling funds where it is permitted. In real life if a casino doesn't think you got a chip from them directly as part of gaming at that casino they won't pay out on it.…

> In real life if a casino doesn't think you got a chip from them directly as part of gaming at that casino they won't pay out on it. That actually happens with some regularity.

Really? In Bringing Down the House there was a plot point of the crew enlisting strippers to cash in their chips, because they could do so easily and without attracting suspicion because it was normal for them to get paid in casino chips.

Re: Regulators Have Doubts About Facebook Cryptocurrency, and So Do Its Partners

#36

Post by pjc50 »

lammalamma25 wrote: post #13

Call me dumb for saying this, but I can go to a casino or chuck e. cheese and trade in USD for chips I use at their location. I could take those chips somewhere else if I wanted to and use them with anyone willing to take them. Why is Libra so upsetting? Isn't it the same thing? It seems to me like criticizing Facebook is just the fashionable response to it right now.

This is actually a very valid question - what is the difference between a company token, a casino chip, a "reward point", company scrip, gift cards, Steam account balances, Steam hats, unlicensed money transmitters, hawala banks, bearer bonds, Jaffa cakes, e-gold, Liberty reserve, Scottish banknotes, shadow banks, Libera, Canadian Tyre money, the Black Sheep Bank, a piece of paper with "IOU £10" written on it, a cheque written on a cow, an unpaid invoice, a Totnes pound, a Zimbabwe dollar, and Bitcoin?

Broadly they fall into these categories:

- debt-like: bonds, banknotes, credit balances, invoice/PO pairs, chips, and so on. Things where theoretically you could redeem it for the face value of real money. These should appear as liabilities on the balance sheet of the issuer. There may be problems if this gets very large.

- redeemable for services: Canadian Tyre, most gift cards. If you look closely at a lot of these things they will have an "equivalent cash value" of a tiny fraction of a penny printed on the back.

- "those that belong to the emperor": state-issued money

- security-like (Howey Test, and similar rules elsewhere): this is the big one for cryptocurrencies, since it depends very heavily on the marketing. If Libera is floating this may be a problem. If it's a normal token redeemable at a par value, it's not.

- non-redeemable consumable or durable items that are commonly used in barter: can usually be distinguished from money by not having a face value of any kind. Steam items don't look like money even if they can be traded.

I agree that a lot of this is combining people getting upset about cryptocurrency with people getting upset about Facebook, but in both cases there are underlying valid points; there is also potentially a TBTF issue - how much is Facebook going to issue, and what effects would its huge market dominance have?

Re: Regulators Have Doubts About Facebook Cryptocurrency, and So Do Its Partners

#39

Post by Mengkudulangsat »

Why not we all just... let them launch and see what happens?

Libra is nothing more than the latest iteration of a long line of stablecoins a-la Tether, USDC, GUSD etc. I find the industry and regulatory overreaction puzzling, surely these issues have been explored before?

The "But it's Facebook!" argument disingenuous, any one of the popular chat app has, or can replicate this experiment (Wechat, Telegram, Slack, Kakao, Line, Twitch, Discord).

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