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Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

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Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#31

Post by buboard »

redorb wrote: post #27
buboard wrote: post #22

Earlier quoted context omitted.

It's not banking laws at all, it is the way they set up the association, I presume precisely to avoid fears like this. I think there are not clear laws yet about this kind of backed stablecoins. However, their reserve will be 100% , which is way more than any bank.

I feel like this is E-gold 2.0 maybe 3.0 with BTC being 2.0 https://en.wikipedia.org/wiki/E-gold

E-gold was a scam IIRC, while libra's assets :

> the assets in the Libra Reserve will be held by a geographically distributed network of custodians with investment-grade credit rating to provide both security and decentralization of the assets.

And BTC is not backed by anything, it has intrinsic value now so it's wrong to call it a scam.

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#32

Post by gridlockd »

traek wrote: post #8
TheRealPomax wrote: post #6

My main concern about libra is that, by being strongly tied to real currencies, libra issuers (not just facebook, all of them) have effectively assumed the role of unsanctioned mints, with the ability to damage the stability of each currency because libra is not tied to the international exchange system: if you pay facebook, or anyone else, $10 and they convert that into libra, now they have $10 that they will absolu…

This is how every bank works.

Libra isn't doing fractional reserve, it's full reserve. If you want to do fractional reserve banking, you have to be a bank.

Having said that, if you want to issue worthless tokens backed by nothing in exchange for real money, you can do that. That's your average initial coin offering. Laws still apply and you need to do due diligence, but it's possible.

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#33

Post by [deleted] »

devoply wrote: post #29
gridlockd wrote: post #28

Earlier quoted context omitted.

The original 10$ aren't "gone", they're held in reserve in the form of bank deposits and government bonds. If you hold Libra, you supposedly have a claim against those. This is unlike a fractional-reserve bank, which can turn those most of those $10 into loans of any sort and still pretend it's cash that's available at any time.

Not just one loan, like 10 loans.

[deleted]

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#34

Post by gridlockd »

politician wrote: post #12
traek wrote: post #8

Earlier quoted context omitted.

This is how every bank works.

Fractional reserve banking usually requires some non-zero percentage of deposits to be withheld.

In virtually all developed nations, the requirement is either zero or single-digit percent.

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#35

Post by tlb »

TheRealPomax wrote: post #6

My main concern about libra is that, by being strongly tied to real currencies, libra issuers (not just facebook, all of them) have effectively assumed the role of unsanctioned mints, with the ability to damage the stability of each currency because libra is not tied to the international exchange system: if you pay facebook, or anyone else, $10 and they convert that into libra, now they have $10 that they will absolu…

Every bank and credit card is also an unsanctioned mint. It works fine. The actual minting of money has not been a major factor in managing the money supply in a long time. It's all done by setting interest rates.

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#36

Post by anchpop »

nostrademons wrote: post #19
wil421 wrote: post #10

Earlier quoted context omitted.

>someone else will come up with a cryptocurrency that's actually useful You named 8 different digital coins. Why aren’t any of them useful? Why do we need other ones?

It's like any other startup: building a product that's useful enough to get widespread adoption requires nailing a lot of different details. You leave one critical feature off and you don't get adoption. You get all of them right and the product takes off on a hypergrowth curve. It's like how Reddit took off once they added comments, or AirBnB took off once they started taking professional-quality photos. It's not th…

Do you view privacy as an important quality? Nano seems like a pretty good attempt at making a cryptocurrency that's useful as a currency, but transactions are not private and I'm not sure how big of a problem that is

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#37

Post by dmix »

DiseasedBadger wrote: post #9
conanbatt wrote: post #2

After 10 years of the crypto-crazies of bitcoin denouncing the power of central banks, a private company announces to do a version of a crypto-currency and is under fire from a central bank. Clearly they got something right.

Nothing about Libra denounces the power of central banks. Facebook just becomes an unregulated central bank.

I don’t know why people keep calling Libra unregulated as if some registered entity in Switzerland is going to protect them from gov scrutiny around the world. There’s no way they don’t face regulatory pressure as soon as they start operating, assuming it can even get to the size and scale where regulators even care about it.

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#38

Post by benj111 »

gridlockd wrote: post #34
politician wrote: post #12

Earlier quoted context omitted.

Fractional reserve banking usually requires some non-zero percentage of deposits to be withheld.

In virtually all developed nations, the requirement is either zero or single-digit percent.

zero?

What happens when someone wants to make a withdrawal?

Re: Fed Chair Jerome Powell Has ‘Serious Concerns’ with Facebook Libra Proposal

#40

Post by rtkwe »

benj111 wrote: post #38
gridlockd wrote: post #34

Earlier quoted context omitted.

In virtually all developed nations, the requirement is either zero or single-digit percent.

zero? What happens when someone wants to make a withdrawal?

The operative word there is requirement. Banks in 0% reserve countries don't have to keep cash around but do to serve as their actual functions as banks.
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