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This appears to be: 1. Pegged to USD 2. Controlled by a central entity 3. Tied to a social media account So it has very little to do with currencies like bi

This appears to be: 1. Pegged to USD 2. Controlled by a central entity 3. Tied to a social media account So it has very little to do with currencies like bitcoin (it certainly violates the spirit of them, even if it chooses to reproduce some of the morphology), but they are IMO associating it with cryptocurrencies for publicity and more importantly in the hope of avoiding regulation by confounding regulators for long enough to become established de-facto amongst consumers. Banks and payment networks like Visa/Mastercard/Paypal should be most worried by this, as it will be designed to cut them out of transactions between users, advertisers, readers of media/news entirely - load up your account with Facebook coins (have they really called it 'Libra coin'?!?), and merchants will not have to pay mastercard, but they'll have to pay Facebook fees to accept your payment.

throwawaylolx 7y ago
>payment networks like Visa/Mastercard/Paypal should be most worried by this I don't think they're worried seeing that they're some of the biggest investors in the project https://www.wsj.com/articles/facebooks-new-cryptocurrency-gets-big-backers-11560463312 https://www.wsj.com/articles/facebooks-new-cryptocurrency-ge...
- grey-area 7y ago
  I’d be concerned if dealing with Zuckerberg. If it fails they lose lots of money, if it succeeds FB has huge leverage over them which it didn’t have before. Can’t really see an upside for these companies to this.
  - russdpale 7y ago
    The point is that its "trustless", they don't have to trust zuckerberg, they can see the code themselves and where the payments fee's break way to, he isn't the only one running nodes from what I understand, I believe the partners are as well, which I imagine is the only way they agreed to this.
    - grey-area 7y ago
      We'll see, I suspect FB will retain sufficient control for it to require trusting FB.
  - gervase 7y ago
    If it fails, they lose their investment, which I believe was only on the order of double-digit millions, which is nothing to Visa. If it succeeds with their investment, they have a tiny amount of leverage. If it succeeds without their investment, they have no leverage at all. A $10MM investment as a hedge against that outcome makes a lot of business sense, from a risk mitigation standpoint. The size of the investment is also indicative of their relative confidence that it will succeed - if they were sure that it would succeed and supplant their core business, they'd probably be investing a lot more.
rafiki6 7y ago
When it comes to the financial system, the thing that gets most companies is regulation. As much as these tech companies want to play bank, they just don't have the right skillset to navigate the complexity of regulations across multiple regions. Finance's problem isn't tech. People assume the issue with a banks payment system is the fact that it runs on some mainframe running Cobol. False. The main problem is that the payment and settlements network is established and works well enough that there's really little actual value in investing any further to upgrade it. Many banks did jump on the bandwagon of blockchain, hoping it might solve some of the challenges of inter-bank settlements, but it hasn't panned out the way they thought (basically think back-office employees who do much of the settlement verification being replaced or automated away). Facebook has less than a percentage point of a chance of upending current payment networks. Even starting from today it would take them at least 20 years to effectively build up the competence to navigate the politics and regulation of our current financial system. Do you remember the hype surrounding Zucks day infront of congress? Guess what...that happens almost annually for a bank and it never makes the news. Forget the well established lobby banks have that FB and other tech companies don't even come close to achieving. Visa is doing the smart thing and investing in this as it will probably find some traction given FB's reach, but poses almost no real threat to Visa in anyway. Personal and Commercial banks' main business isn't really payments, but rather loans. They offer payments since they already have a well established settlements network and serve as gatekeepers to the financial system. I'd love to see where this goes, but I have a really hard time believing that this will grow beyond anything but another FB digital currency. There's a fundamental aspect of currency where it's tied to a government as well as a country and it's world dominance. There's a reason the USD is the reserve currency of the world, and yet another reason the government is the owner of the USD. Bitcoin at least tried to challenge this dominance. FB isn't even thinking like that clearly. They have another play in mind, and frankly it's not entirely clear what it is.
- grey-area 7y ago
  I agree with some of what you say here, but do think payments is ripe for transformation and the software companies will do so, as they have so many other industries. The goal is quite simple, to own global payments (a trillion dollar market currently owned by a cosy duopoly). The intended method is to do an end run around regulation as they have done with privacy regulation (hence the bitcoinish cover). I disagree it is smart for visa to invest unless they have a majority interest.

throwawaylolx 7y ago

>payment networks like Visa/Mastercard/Paypal should be most worried by this I don't think they're worried seeing that they're some of the biggest investors in the project https://www.wsj.com/articles/facebooks-new-cryptocurrency-gets-big-backers-11560463312 https://www.wsj.com/articles/facebooks-new-cryptocurrency-ge...

grey-area 7y ago
I’d be concerned if dealing with Zuckerberg. If it fails they lose lots of money, if it succeeds FB has huge leverage over them which it didn’t have before. Can’t really see an upside for these companies to this.
- russdpale 7y ago
  The point is that its "trustless", they don't have to trust zuckerberg, they can see the code themselves and where the payments fee's break way to, he isn't the only one running nodes from what I understand, I believe the partners are as well, which I imagine is the only way they agreed to this.
  - grey-area 7y ago
    We'll see, I suspect FB will retain sufficient control for it to require trusting FB.
- gervase 7y ago
  If it fails, they lose their investment, which I believe was only on the order of double-digit millions, which is nothing to Visa. If it succeeds with their investment, they have a tiny amount of leverage. If it succeeds without their investment, they have no leverage at all. A $10MM investment as a hedge against that outcome makes a lot of business sense, from a risk mitigation standpoint. The size of the investment is also indicative of their relative confidence that it will succeed - if they were sure that it would succeed and supplant their core business, they'd probably be investing a lot more.

rafiki6 7y ago

When it comes to the financial system, the thing that gets most companies is regulation. As much as these tech companies want to play bank, they just don't have the right skillset to navigate the complexity of regulations across multiple regions. Finance's problem isn't tech. People assume the issue with a banks payment system is the fact that it runs on some mainframe running Cobol. False. The main problem is that the payment and settlements network is established and works well enough that there's really little actual value in investing any further to upgrade it. Many banks did jump on the bandwagon of blockchain, hoping it might solve some of the challenges of inter-bank settlements, but it hasn't panned out the way they thought (basically think back-office employees who do much of the settlement verification being replaced or automated away). Facebook has less than a percentage point of a chance of upending current payment networks. Even starting from today it would take them at least 20 years to effectively build up the competence to navigate the politics and regulation of our current financial system. Do you remember the hype surrounding Zucks day infront of congress? Guess what...that happens almost annually for a bank and it never makes the news. Forget the well established lobby banks have that FB and other tech companies don't even come close to achieving. Visa is doing the smart thing and investing in this as it will probably find some traction given FB's reach, but poses almost no real threat to Visa in anyway. Personal and Commercial banks' main business isn't really payments, but rather loans. They offer payments since they already have a well established settlements network and serve as gatekeepers to the financial system. I'd love to see where this goes, but I have a really hard time believing that this will grow beyond anything but another FB digital currency. There's a fundamental aspect of currency where it's tied to a government as well as a country and it's world dominance. There's a reason the USD is the reserve currency of the world, and yet another reason the government is the owner of the USD. Bitcoin at least tried to challenge this dominance. FB isn't even thinking like that clearly. They have another play in mind, and frankly it's not entirely clear what it is.

grey-area 7y ago
I agree with some of what you say here, but do think payments is ripe for transformation and the software companies will do so, as they have so many other industries. The goal is quite simple, to own global payments (a trillion dollar market currently owned by a cosy duopoly). The intended method is to do an end run around regulation as they have done with privacy regulation (hence the bitcoinish cover). I disagree it is smart for visa to invest unless they have a majority interest.