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Paypal Withdraws from Facebook's Libra Cryptocurrency

538 points by coloneltcb 7y ago

Retroity 7y ago
Interesting, but not surprising considering all the pressure from governments regarding Libra. I wonder if Facebook will ever back down from Libra considering how popular it is, or if they're going to adopt a "rain or shine" attitude and go forward with it regardless of what happens?
- tpmx 7y ago
  I'm sure they will launch it in a number of struggling countries.
  - sriram_sun 7y ago
    Don't you think they would get muscled out of these failed states if they don't pay up (lobby)?
    - tpmx 7y ago
      They'd need to pay more than the other robbers, sure. Shouldn't really be a problem for them, though. Something funny happens when the monetary contribution from a company to a country/government moves from millions to billions. It changes from a potential bribe that people want to keep quiet about to an investment that people want to boast about. And yet it's trivial to siphon between 10-70% of that "investment" into private pockets depending on the country.
    - zupreme 7y ago
      Muscled out how? VPN’s are global...
      - SXX 7y ago
        Political problems can't be solved with tech. VPN won't help when someone decide to put you in prison for using illegal crypto.
        zupreme 7y ago
        Yet it occurs...globally... Proxies too. Teenagers install proxy modules on their own phones and APs all the time across the globe. This “illegal crypto” is simple a series of mathematical algorithms. You cannot truly “ban” math.
- dessant 7y ago
  I think governments actually want Libra, what we're seeing is the role of Facebook in all of this being forcefully reshaped to better serve the needs of governments. Facebook will be compelled to give up some of the control and access over this new identity system in exchange for being allowed to operate it.
  - r00fus 7y ago
    I personally hope key governments deep-six it. Facebook has shown itself to be untrustworthy for personal data - in what interesting ways will they abuse a custodial role on a currency?
    - josephagoss 7y ago
      Governments are as untrustworthy as Facebook but more scary as they have a monopoly on violence and can take away your life. The best outcome here is that Libra doesn't launch at all in any capacity.
      - consumer451 7y ago
        The difference is democracy.
      - DaiPlusPlus 7y ago
        > Governments are as untrustworthy as Facebook but more scary as they have a monopoly on violence and can take away your life. That’s an extreme and reductionist position - and I feel it’s an incorrect position. The state does not have a monopoly on violence - certainly not in practice, and in most democracies today the state is expressly forbidden from using any kind of physical force (domestically, at least) excepting emergencies (e.g. police shootouts). Corporations /can/ be just as bad: look at brutal Fortune 500-sponsored union-suppression in South America happening today, for example.
        manquer 7y ago
        State has absolute monopoly on legal violence. Expect for very few exceptions like defending your home , self defence etc, you are even not allowed even show force let alone act violently. State does not need to use violence in stable democracies they just have make sure ppl know they can to get everyone in line. Also violence is not always physical. Threatening incarceration/ social humiliation / jail time for parole violations/ job loss and other economic harm etc is common tactic law enforcement employ to get cooperation. Finally the state also offers the candy of lower jail time reduced charges and assorted other incentives for cooperation all of it beneficial because of the harm associated with the alternatives.
- eugeniub 7y ago
  > considering how popular it is Excuse me, popular with whom?
  - kache_ 7y ago
    Maybe it's not in use, but it's been getting a lot of press. It's on people's radar and that's valuable in and of itself.
    - whoisjuan 7y ago
      The only press coverage I see about Libra is how governments are not gonna let this run and a bunch of other negative remarks (possibly drawn from the fact that this is a Facebok project which is seen as am evil company by many). I don’t understand how is that valuable? If that’s valuable then all companies with bad press would increase their valuations. Unlike the popular saying there’s actually such thing as “bad press”.
  - MereInterest 7y ago
    Popular with people who are looking for another pyramid scheme to invest in, perhaps.
    - justapassenger 7y ago
      Libra is nothing like bitcoin - it doesn't have investment potential - it's 100% backed by basket of fiat money.
      - jameslevy 7y ago
        It does have some potential to act as a hedge against USD. It will probably produce some small amount of capital gains (or losses) for its users.
        whoanow 7y ago
        I don't think so, there is no way it would achieve mainstream adoption if there was a potential tax liability for users spending their after tax dollars.
- drcode 7y ago
  Facebook will never back down from Libra, they'll just release a "watered down" version of Libra that's essentially just store credit like "Amazon Bucks" and then sunset it after it's forgotten.
csomar 7y ago
Here are some wild predictions I'm making + Many (or potentially all of the backers except Facebook) will withdraw from the alliance. + Facebook/Zuckerberg will defy the gov.s and launch Libra. + Libra might not dominate the world, but it'll be a success (at least a niche success) and it'll eat up some of the marketshare of these financial institutions. I think Zuckerberg has come (or already know) to the realization that these institutions "added value" is navigating the regulations/laws of the different countries. They are a kind of monopoly. Sending money across "borders" is hard only because governments made it so. If Libra ignored these rules, they'll put these guys (or at least a part of their offerings) out of business. Why would anybody use Western Union if they can send money through their Facebook for less or no fees? It's easier and more convenient too.
- colechristensen 7y ago
  +1 for the first and second points, but I think it will play out much differently. Facebook will try to defy regulators, but I think the SEC will stomp on them, hard. It will end up a hybrid battle in the courts and Congress between libertarians, a few flavors of privacy advocates, US regulatory concerns, and ultimately land on US power projection concerns. I think the US will eventually shape the law and regulatory environment to prevent the existence of any cryptocurrency with its own valuation - distributed ledgers denominated in central bank currencies will be all that is allowed at the end. The US financial system is a core pillar of US world power and Congress isn't going to give that power away to Facebook. It will be a complex road because the issues are difficult to grok.
  - wmf 7y ago
    I think the US will eventually shape the law and regulatory environment to prevent the existence of any cryptocurrency with its own valuation - distributed ledgers denominated in central bank currencies will be all that is allowed at the end. Existing SEC/CFTC/FinCen rulings seem to point in a very different direction. They've had many opportunities to shut down Bitcoin and have not done it.
    - 7y ago
pxtail 7y ago
Well, well, well suddenly it looks like everyone who is making money thanks to current status quo is withdrawing from initiative/opposing it. Probably it means that FB is doing something right... Question is if FB is strong/clever enough to keep moving forward.
- benj111 7y ago
  Why were they in the initiative to start with then???
  - jimmaswell 7y ago
    PR and to make it look bad by withdrawing, maybe.
- adjkant 7y ago
  Or that no one trusts Facebook and companies realize that, and no one really thinks they need Libra?
  - pxtail 7y ago
    Who is this "no one"? HN commenters living within bubble? Of course "companies realize" - this idea is a game changer, it could make them partially obsolete or quite heavily decrease profits. On the other side of equation there are over 2 billions [0] of users, users who WILL GLADLY USE this cryptocurrency if/when it becomes available. [0]https://www.statista.com/statistics/264810/number-of-monthly-active-facebook-users-worldwide/ https://www.statista.com/statistics/264810/number-of-monthly...
    - adjkant 7y ago
      > Who is this "no one"? HN commenters living within bubble? The negative press cycle they got over the past year was quite public, not in a bubble. > On the other side of equation there are over 2 billions [0] of users, users who WILL GLADLY USE this cryptocurrency if/when it becomes available. In what world does a Facebook user = someone who wants crypto? Most people don't even know what it is, let alone trust it enough to put real money into it. Reminder, most Facebook users don't even have a payment method associated to their account because Facebook is free. That barrier alone is big. Then you have people that know crypto from last year and that it's a risky investment that doesn't make any sense and crashes. Again, what Facebook user thinks they need Libra?
rq1 7y ago
Max Weber seems unfashionable in Menlo Park. What do they want to achieve without military and police power anyway?
vertex-four 7y ago
If Facebook attempts to become a money transfer service or bank without the required licensing, they will have their offices raided and their doors locked on them. This is something Governments don't tend to mess around with.
- nikanj 7y ago
  FB is banking (pun unnintended) on the regulators and goverments being absolutely useless lately. Both AirBnB and Uber built empires on ”What if we just ignore the rules”
  - delecti 7y ago
    AirBnB and Uber just kinda did it first and then asked permission. Facebook's only tiny hope of that strategy working was to announce Libra as being available first, not announcing the plan to governments first. Plus, taxi and hotel regulations are a very different situation than laws intended to prevent international money laundering, tax evasion, sanction breaking, or black market economies.
    - deleted 7y ago
      [deleted]
  - Rapzid 7y ago
    Both AirBnB and Uber had the benefit of governments that generally wanted to try to work something out with them.
  - JumpCrisscross 7y ago
    > Both AirBnB and Uber built empires on ”What if we just ignore the rules“ Municipal regulations. Not federal and state laws with criminal penalties. Wilfully breaching AML statute is arson to Uber’s parking tickets.
    - wpietri 7y ago
      Exactly. Municipal regulators were unprepared for somebody with a billion dollars willfully breaking laws. And the laws were not a huge deal. For financial regulators, it's their bread and butter, and the laws are most definitely a big deal. Money laundering is a problem they are very serious about because it enables so much other crime. I'm sure Facebook would not be dumb enough to step in front of that train, but if they did, it would run them flat. There's also a sort of 9/11 effect going on here. The reason the 9/11 hijackers pulled it off was that nobody expected them to use the planes as giant suicide bombs. Previous hijackings generally ended peacefully, so everybody just stayed chill. But that window of opportunity expired before they managed to crash the 4th plane. Now nobody's just going to sit quietly through a hijacking. Similarly, I think the reason Uber and Airbnb got away with so much lawbreaking is that it was novel to have nominally respectable companies blatantly committing a wide variety of crimes. But these days, tech companies get a lot of suspicion. Regulators are not interesting in getting caught flat-footed again. And that was true 5 years ago; SF vigorously shut down a bunch of entrepreneurs that wanted to sell public parking spaces back to the public: https://www.govtech.com/transportation/SF-Demands-MonkeyParking-App-Stop-Auctioning-Spaces.html https://www.govtech.com/transportation/SF-Demands-MonkeyPark...
nxtninja 7y ago
Maybe soon the headlines will be "Paypal one of the Trustline of Stellar" :)
wpdev_63 7y ago
Zuckerberg is really ballsy to go up against the government like this. I hope he has some really good security cause I can't see the US government rolling over.
- biesnecker 7y ago
  I can't see the US government rolling over either, but him having security or not is not an issue. The US government has means beyond those of the average opposing gang leader if they want to shut the business down.
omfgwhat 7y ago
Surprising since David Marcus, the head of Libra, was once the CEO of Paypal.
- dao- 7y ago
  Is it in PayPal's interest that Libra succeeds? It seems that they would be competitors. They might just have backed it strategically to somehow have a stake in it if it takes off big time. Given the pushback they could now bank on the whole thing failing instead.
  - antpls 7y ago
    The point of the cryptocurrency was to decentralize Libra amongst several actors, such as Visa, Master Card, Paypal, etc If done, Libra would have been the common interest of all those actors. That was the goal of the project.
    - dao- 7y ago
      That doesn't seem to contradict what I said? Sure, PayPal wanted a stake in this assuming it would become a success that they couldn't stop... but they may still be better off if Libra doesn't become a success in the first place.
    - Traster 7y ago
      So the plan was to form a cartel in public?
hamzaahemad 7y ago
Good news
jramey 7y ago
Probably for the best.
tanilama 7y ago
Libra can be a good idea, but probably not from Facebook. What Facebook lacks among Big Techs the most, is public trust. In an era where anything from Big Techs are meticulously scrutinized, something that seems to aim to bypass government regulation is probably the last thing people want.
- xlc0212 7y ago
  What I don’t understand is, the whole point of using blockchain technology is it doesn’t matter who creates it, as long as the code does what it intend to do, there are no trust needed. (Assuming Libra eventually actually become a decentralized network)
  - adjkant 7y ago
    That assumption is huge. The other problem is that this tech doesn't really solve a problem most people have, so there's no motivation against waiting for a different company to try this. Heck they could even use the same code and no one would care probably. But so long as the Facebook brand is on it, it will go nowhere today.
  - speedplane 7y ago
    > the whole point of using blockchain technology is it doesn’t matter who creates it, as long as the code does what it intend to do, there are no trust needed That may have been the original point of blockchain, but control over money is still a pretty political issue. Accordingly, anyone who creates or transacts currency, regardless if done by fiat or mathematics, will necessarily wade into local political and social restrictions. Bitcoin is impressive technology and definitely brought a nice jab to government monetary control, but it does not seem to be able to deliver a knock-out. No government will give up control over monetary policy without a fight. If governments can't control bitcoin directly, they'll do so indirectly (making them difficult to cash-out, blocking IPs, straight-up making it illegal). It's yet another example of tech's beautifully orchestrated high-minded ideals, that come crashing down when they meet real power and reality.
    - 7y ago
sebastianconcpt 7y ago
Federal Reserve Chairman Jerome Powell said this summer that libra raises “serious concerns regarding privacy, money laundering, consumer protection, financial stability” and the Fed had launched a working group to examine it.
hatchingalpha 7y ago
https://hatchingalpha.com/schwab-will-be-the-winner-the-race-to-0-trading-commissions/ https://hatchingalpha.com/schwab-will-be-the-winner-the-race...
democracy 7y ago
When Facebook needs to jump on the train of "cryptocurrency" something is wrong with the company and makes me really question their competence... Is it really Zuck behind this idea or just some top manager with ambitions? I still don't understand why they had to shut down "facebook credits" and come up with this crazy idea, when all they had to do to start "facebook credits v2" and that would draw zero attention.
- pier25 7y ago
  I don't trust nor agree with Facebook but I can see the appeal. I recently sold a synth on its Marketplace which I had never used before. Here in Mexico its extremely popular. If Facebook starts using Libra for payments and escrow without having to pay credit card or bank transfer fees it would make it much more popular than Bitcoin. At least for small transactions.
buboard 7y ago
Maybe they ll go with the chinese one instead
paulie_a 7y ago
So crappy payment company removes support for unsupported privacy theft company. Sounds like a win win. This is amazing win for tech.
lowracle 7y ago
It is now pretty clear that those financial institution joined Libra only because they saw it as a threatening competitor in the space. Now that they think that the project is unlikely to be implemented due to strong opposition from govt, they are leaving. I believe they are doing a big mistake, and that Libra will still be successful.
Nokinside 7y ago
Big megacorps suck at innovation. Their internally developed product innovations are typically crap. This comes as a surprise for companies like Facebook because they were once internet startups. They still see themselves as youthful and innovative. Wearing T-shirt or being casual may correlate with innovation, but there is no causality. The founder/CEO had success with one big idea that turned into success. What evidence there is that they can recognize and repeat the success multiple times? They can successfully refine and expand their original idea and grow it, but their internally developed 'disruptions' are crap just like any random pitch. Microsoft, Facebook, Apple, Google, Amazon buy new ideas, then use the economics of scale and network effects to make it success. Amazon has expanded the idea of internet retail from books to everything, including data centers. Apple finds success in design and branding competence. Google is still search and advertising company.
- randomsearch 7y ago
  Agree with your general point but I think Apple and Amazon are clear examples of big corps that have continued to innovate. My hypothesis is that companies with CEOs able to stay close to the end users and keep a product focus are able to counterbalance the main problem with big companies - that their decision makers are no longer close to their customers. I think they’re exceptions though.
  - Nokinside 7y ago
    Can you mention biggest Apple or Amazon innovations in the last 10 years that: 1. Are not incremental, or just leveraging existing business to obvious directions. 2. originated internally 3. turned into big profitable business.
    - tim333 7y ago
      How many innovations from any source turn into profitable business within 10 years? It's a very small percentage.
      - 7y ago
tedsuo 7y ago
I suspect that fb is dialing back their ambitions with libra, to something that is more like a regular money transfer service. PayPal and other partners would naturally be less interested in that; it’s just more competition.
aey 7y ago
Next week: PayPal announces Pal, the cryptocurrency for friends.
segmondy 7y ago
Not surprised, when I saw the heavyweights all part of Libra, I think this was their intention all along. They hoped that it would fail, I wouldn't be surprised if behind the scenes they lobbied against it. They seem to have latched onto it so if it took off they won't be left behind. It was really order seeing companies like MasterCard & PayPal as part of it.
vfc1 7y ago
I hope Libra goes through, even with the Cambridge Analytica scandal and everything. It might lite a fire under goverments to take some action and create a proper crypto currency at the state or maybe even EU level for example, it's time. Just try to run a business and take online payments via credit card, using something like Stripe for example. Literally near 8 to 10% of your transactions will FAIL, just like that. Customers that want to pay you and their card fails a huge percentage of times, preventing you from gaining recurring customers. The current credit card system is a mess, its a thing of the past sorely needing competition. It's ready to be disrupted by the next big thing and if its Facebook Libra, I'll take it.
SkyMarshal 7y ago
I suspect France, Germany, US and other govs are pressuring PayPal, Mastercard, VISA and others to withdraw, and that’s the main reason they’re getting cold feet.

538 points by coloneltcb 7y ago

Interesting, but not surprising considering all the pressure from governments regarding Libra. I wonder if Facebook will ever back down from Libra considering how popular it is, or if they're going to adopt a "rain or shine" attitude and go forward with it regardless of what happens?

tpmx 7y ago
I'm sure they will launch it in a number of struggling countries.
- sriram_sun 7y ago
  Don't you think they would get muscled out of these failed states if they don't pay up (lobby)?
  - tpmx 7y ago
    They'd need to pay more than the other robbers, sure. Shouldn't really be a problem for them, though. Something funny happens when the monetary contribution from a company to a country/government moves from millions to billions. It changes from a potential bribe that people want to keep quiet about to an investment that people want to boast about. And yet it's trivial to siphon between 10-70% of that "investment" into private pockets depending on the country.
  - zupreme 7y ago
    Muscled out how? VPN’s are global...
    - SXX 7y ago
      Political problems can't be solved with tech. VPN won't help when someone decide to put you in prison for using illegal crypto.
      - zupreme 7y ago
        Yet it occurs...globally... Proxies too. Teenagers install proxy modules on their own phones and APs all the time across the globe. This “illegal crypto” is simple a series of mathematical algorithms. You cannot truly “ban” math.
dessant 7y ago
I think governments actually want Libra, what we're seeing is the role of Facebook in all of this being forcefully reshaped to better serve the needs of governments. Facebook will be compelled to give up some of the control and access over this new identity system in exchange for being allowed to operate it.
- r00fus 7y ago
  I personally hope key governments deep-six it. Facebook has shown itself to be untrustworthy for personal data - in what interesting ways will they abuse a custodial role on a currency?
  - josephagoss 7y ago
    Governments are as untrustworthy as Facebook but more scary as they have a monopoly on violence and can take away your life. The best outcome here is that Libra doesn't launch at all in any capacity.
    - consumer451 7y ago
      The difference is democracy.
    - DaiPlusPlus 7y ago
      > Governments are as untrustworthy as Facebook but more scary as they have a monopoly on violence and can take away your life. That’s an extreme and reductionist position - and I feel it’s an incorrect position. The state does not have a monopoly on violence - certainly not in practice, and in most democracies today the state is expressly forbidden from using any kind of physical force (domestically, at least) excepting emergencies (e.g. police shootouts). Corporations /can/ be just as bad: look at brutal Fortune 500-sponsored union-suppression in South America happening today, for example.
      - manquer 7y ago
        State has absolute monopoly on legal violence. Expect for very few exceptions like defending your home , self defence etc, you are even not allowed even show force let alone act violently. State does not need to use violence in stable democracies they just have make sure ppl know they can to get everyone in line. Also violence is not always physical. Threatening incarceration/ social humiliation / jail time for parole violations/ job loss and other economic harm etc is common tactic law enforcement employ to get cooperation. Finally the state also offers the candy of lower jail time reduced charges and assorted other incentives for cooperation all of it beneficial because of the harm associated with the alternatives.
eugeniub 7y ago
> considering how popular it is Excuse me, popular with whom?
- kache_ 7y ago
  Maybe it's not in use, but it's been getting a lot of press. It's on people's radar and that's valuable in and of itself.
  - whoisjuan 7y ago
    The only press coverage I see about Libra is how governments are not gonna let this run and a bunch of other negative remarks (possibly drawn from the fact that this is a Facebok project which is seen as am evil company by many). I don’t understand how is that valuable? If that’s valuable then all companies with bad press would increase their valuations. Unlike the popular saying there’s actually such thing as “bad press”.
- MereInterest 7y ago
  Popular with people who are looking for another pyramid scheme to invest in, perhaps.
  - justapassenger 7y ago
    Libra is nothing like bitcoin - it doesn't have investment potential - it's 100% backed by basket of fiat money.
    - jameslevy 7y ago
      It does have some potential to act as a hedge against USD. It will probably produce some small amount of capital gains (or losses) for its users.
      - whoanow 7y ago
        I don't think so, there is no way it would achieve mainstream adoption if there was a potential tax liability for users spending their after tax dollars.
drcode 7y ago
Facebook will never back down from Libra, they'll just release a "watered down" version of Libra that's essentially just store credit like "Amazon Bucks" and then sunset it after it's forgotten.

csomar 7y ago

Here are some wild predictions I'm making + Many (or potentially all of the backers except Facebook) will withdraw from the alliance. + Facebook/Zuckerberg will defy the gov.s and launch Libra. + Libra might not dominate the world, but it'll be a success (at least a niche success) and it'll eat up some of the marketshare of these financial institutions. I think Zuckerberg has come (or already know) to the realization that these institutions "added value" is navigating the regulations/laws of the different countries. They are a kind of monopoly. Sending money across "borders" is hard only because governments made it so. If Libra ignored these rules, they'll put these guys (or at least a part of their offerings) out of business. Why would anybody use Western Union if they can send money through their Facebook for less or no fees? It's easier and more convenient too.

colechristensen 7y ago
+1 for the first and second points, but I think it will play out much differently. Facebook will try to defy regulators, but I think the SEC will stomp on them, hard. It will end up a hybrid battle in the courts and Congress between libertarians, a few flavors of privacy advocates, US regulatory concerns, and ultimately land on US power projection concerns. I think the US will eventually shape the law and regulatory environment to prevent the existence of any cryptocurrency with its own valuation - distributed ledgers denominated in central bank currencies will be all that is allowed at the end. The US financial system is a core pillar of US world power and Congress isn't going to give that power away to Facebook. It will be a complex road because the issues are difficult to grok.
- wmf 7y ago
  I think the US will eventually shape the law and regulatory environment to prevent the existence of any cryptocurrency with its own valuation - distributed ledgers denominated in central bank currencies will be all that is allowed at the end. Existing SEC/CFTC/FinCen rulings seem to point in a very different direction. They've had many opportunities to shut down Bitcoin and have not done it.
  - 7y ago

pxtail 7y ago

Well, well, well suddenly it looks like everyone who is making money thanks to current status quo is withdrawing from initiative/opposing it. Probably it means that FB is doing something right... Question is if FB is strong/clever enough to keep moving forward.

benj111 7y ago
Why were they in the initiative to start with then???
- jimmaswell 7y ago
  PR and to make it look bad by withdrawing, maybe.
adjkant 7y ago
Or that no one trusts Facebook and companies realize that, and no one really thinks they need Libra?
- pxtail 7y ago
  Who is this "no one"? HN commenters living within bubble? Of course "companies realize" - this idea is a game changer, it could make them partially obsolete or quite heavily decrease profits. On the other side of equation there are over 2 billions [0] of users, users who WILL GLADLY USE this cryptocurrency if/when it becomes available. [0]https://www.statista.com/statistics/264810/number-of-monthly-active-facebook-users-worldwide/ https://www.statista.com/statistics/264810/number-of-monthly...
  - adjkant 7y ago
    > Who is this "no one"? HN commenters living within bubble? The negative press cycle they got over the past year was quite public, not in a bubble. > On the other side of equation there are over 2 billions [0] of users, users who WILL GLADLY USE this cryptocurrency if/when it becomes available. In what world does a Facebook user = someone who wants crypto? Most people don't even know what it is, let alone trust it enough to put real money into it. Reminder, most Facebook users don't even have a payment method associated to their account because Facebook is free. That barrier alone is big. Then you have people that know crypto from last year and that it's a risky investment that doesn't make any sense and crashes. Again, what Facebook user thinks they need Libra?

rq1 7y ago

Max Weber seems unfashionable in Menlo Park. What do they want to achieve without military and police power anyway?

vertex-four 7y ago

If Facebook attempts to become a money transfer service or bank without the required licensing, they will have their offices raided and their doors locked on them. This is something Governments don't tend to mess around with.

nikanj 7y ago
FB is banking (pun unnintended) on the regulators and goverments being absolutely useless lately. Both AirBnB and Uber built empires on ”What if we just ignore the rules”
- delecti 7y ago
  AirBnB and Uber just kinda did it first and then asked permission. Facebook's only tiny hope of that strategy working was to announce Libra as being available first, not announcing the plan to governments first. Plus, taxi and hotel regulations are a very different situation than laws intended to prevent international money laundering, tax evasion, sanction breaking, or black market economies.
  - deleted 7y ago
    [deleted]
- Rapzid 7y ago
  Both AirBnB and Uber had the benefit of governments that generally wanted to try to work something out with them.
- JumpCrisscross 7y ago
  > Both AirBnB and Uber built empires on ”What if we just ignore the rules“ Municipal regulations. Not federal and state laws with criminal penalties. Wilfully breaching AML statute is arson to Uber’s parking tickets.
  - wpietri 7y ago
    Exactly. Municipal regulators were unprepared for somebody with a billion dollars willfully breaking laws. And the laws were not a huge deal. For financial regulators, it's their bread and butter, and the laws are most definitely a big deal. Money laundering is a problem they are very serious about because it enables so much other crime. I'm sure Facebook would not be dumb enough to step in front of that train, but if they did, it would run them flat. There's also a sort of 9/11 effect going on here. The reason the 9/11 hijackers pulled it off was that nobody expected them to use the planes as giant suicide bombs. Previous hijackings generally ended peacefully, so everybody just stayed chill. But that window of opportunity expired before they managed to crash the 4th plane. Now nobody's just going to sit quietly through a hijacking. Similarly, I think the reason Uber and Airbnb got away with so much lawbreaking is that it was novel to have nominally respectable companies blatantly committing a wide variety of crimes. But these days, tech companies get a lot of suspicion. Regulators are not interesting in getting caught flat-footed again. And that was true 5 years ago; SF vigorously shut down a bunch of entrepreneurs that wanted to sell public parking spaces back to the public: https://www.govtech.com/transportation/SF-Demands-MonkeyParking-App-Stop-Auctioning-Spaces.html https://www.govtech.com/transportation/SF-Demands-MonkeyPark...

nxtninja 7y ago

Maybe soon the headlines will be "Paypal one of the Trustline of Stellar" :)

wpdev_63 7y ago

Zuckerberg is really ballsy to go up against the government like this. I hope he has some really good security cause I can't see the US government rolling over.

biesnecker 7y ago
I can't see the US government rolling over either, but him having security or not is not an issue. The US government has means beyond those of the average opposing gang leader if they want to shut the business down.

omfgwhat 7y ago

Surprising since David Marcus, the head of Libra, was once the CEO of Paypal.

dao- 7y ago
Is it in PayPal's interest that Libra succeeds? It seems that they would be competitors. They might just have backed it strategically to somehow have a stake in it if it takes off big time. Given the pushback they could now bank on the whole thing failing instead.
- antpls 7y ago
  The point of the cryptocurrency was to decentralize Libra amongst several actors, such as Visa, Master Card, Paypal, etc If done, Libra would have been the common interest of all those actors. That was the goal of the project.
  - dao- 7y ago
    That doesn't seem to contradict what I said? Sure, PayPal wanted a stake in this assuming it would become a success that they couldn't stop... but they may still be better off if Libra doesn't become a success in the first place.
  - Traster 7y ago
    So the plan was to form a cartel in public?

hamzaahemad 7y ago

Good news

jramey 7y ago

Probably for the best.

tanilama 7y ago

Libra can be a good idea, but probably not from Facebook. What Facebook lacks among Big Techs the most, is public trust. In an era where anything from Big Techs are meticulously scrutinized, something that seems to aim to bypass government regulation is probably the last thing people want.

xlc0212 7y ago
What I don’t understand is, the whole point of using blockchain technology is it doesn’t matter who creates it, as long as the code does what it intend to do, there are no trust needed. (Assuming Libra eventually actually become a decentralized network)
- adjkant 7y ago
  That assumption is huge. The other problem is that this tech doesn't really solve a problem most people have, so there's no motivation against waiting for a different company to try this. Heck they could even use the same code and no one would care probably. But so long as the Facebook brand is on it, it will go nowhere today.
- speedplane 7y ago
  > the whole point of using blockchain technology is it doesn’t matter who creates it, as long as the code does what it intend to do, there are no trust needed That may have been the original point of blockchain, but control over money is still a pretty political issue. Accordingly, anyone who creates or transacts currency, regardless if done by fiat or mathematics, will necessarily wade into local political and social restrictions. Bitcoin is impressive technology and definitely brought a nice jab to government monetary control, but it does not seem to be able to deliver a knock-out. No government will give up control over monetary policy without a fight. If governments can't control bitcoin directly, they'll do so indirectly (making them difficult to cash-out, blocking IPs, straight-up making it illegal). It's yet another example of tech's beautifully orchestrated high-minded ideals, that come crashing down when they meet real power and reality.
  - 7y ago

sebastianconcpt 7y ago

Federal Reserve Chairman Jerome Powell said this summer that libra raises “serious concerns regarding privacy, money laundering, consumer protection, financial stability” and the Fed had launched a working group to examine it.

hatchingalpha 7y ago

https://hatchingalpha.com/schwab-will-be-the-winner-the-race-to-0-trading-commissions/ https://hatchingalpha.com/schwab-will-be-the-winner-the-race...

democracy 7y ago

When Facebook needs to jump on the train of "cryptocurrency" something is wrong with the company and makes me really question their competence... Is it really Zuck behind this idea or just some top manager with ambitions? I still don't understand why they had to shut down "facebook credits" and come up with this crazy idea, when all they had to do to start "facebook credits v2" and that would draw zero attention.

pier25 7y ago
I don't trust nor agree with Facebook but I can see the appeal. I recently sold a synth on its Marketplace which I had never used before. Here in Mexico its extremely popular. If Facebook starts using Libra for payments and escrow without having to pay credit card or bank transfer fees it would make it much more popular than Bitcoin. At least for small transactions.

buboard 7y ago

Maybe they ll go with the chinese one instead

paulie_a 7y ago

So crappy payment company removes support for unsupported privacy theft company. Sounds like a win win. This is amazing win for tech.

lowracle 7y ago

It is now pretty clear that those financial institution joined Libra only because they saw it as a threatening competitor in the space. Now that they think that the project is unlikely to be implemented due to strong opposition from govt, they are leaving. I believe they are doing a big mistake, and that Libra will still be successful.

Nokinside 7y ago

Big megacorps suck at innovation. Their internally developed product innovations are typically crap. This comes as a surprise for companies like Facebook because they were once internet startups. They still see themselves as youthful and innovative. Wearing T-shirt or being casual may correlate with innovation, but there is no causality. The founder/CEO had success with one big idea that turned into success. What evidence there is that they can recognize and repeat the success multiple times? They can successfully refine and expand their original idea and grow it, but their internally developed 'disruptions' are crap just like any random pitch. Microsoft, Facebook, Apple, Google, Amazon buy new ideas, then use the economics of scale and network effects to make it success. Amazon has expanded the idea of internet retail from books to everything, including data centers. Apple finds success in design and branding competence. Google is still search and advertising company.

randomsearch 7y ago
Agree with your general point but I think Apple and Amazon are clear examples of big corps that have continued to innovate. My hypothesis is that companies with CEOs able to stay close to the end users and keep a product focus are able to counterbalance the main problem with big companies - that their decision makers are no longer close to their customers. I think they’re exceptions though.
- Nokinside 7y ago
  Can you mention biggest Apple or Amazon innovations in the last 10 years that: 1. Are not incremental, or just leveraging existing business to obvious directions. 2. originated internally 3. turned into big profitable business.
  - tim333 7y ago
    How many innovations from any source turn into profitable business within 10 years? It's a very small percentage.
    - 7y ago

tedsuo 7y ago

I suspect that fb is dialing back their ambitions with libra, to something that is more like a regular money transfer service. PayPal and other partners would naturally be less interested in that; it’s just more competition.

aey 7y ago

Next week: PayPal announces Pal, the cryptocurrency for friends.

segmondy 7y ago

Not surprised, when I saw the heavyweights all part of Libra, I think this was their intention all along. They hoped that it would fail, I wouldn't be surprised if behind the scenes they lobbied against it. They seem to have latched onto it so if it took off they won't be left behind. It was really order seeing companies like MasterCard & PayPal as part of it.

vfc1 7y ago

I hope Libra goes through, even with the Cambridge Analytica scandal and everything. It might lite a fire under goverments to take some action and create a proper crypto currency at the state or maybe even EU level for example, it's time. Just try to run a business and take online payments via credit card, using something like Stripe for example. Literally near 8 to 10% of your transactions will FAIL, just like that. Customers that want to pay you and their card fails a huge percentage of times, preventing you from gaining recurring customers. The current credit card system is a mess, its a thing of the past sorely needing competition. It's ready to be disrupted by the next big thing and if its Facebook Libra, I'll take it.

SkyMarshal 7y ago

I suspect France, Germany, US and other govs are pressuring PayPal, Mastercard, VISA and others to withdraw, and that’s the main reason they’re getting cold feet.