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I’m almost certain that no country in the world wants to loose control over their currency. Especially not the US. The only thing that could happen is that they

I’m almost certain that no country in the world wants to loose control over their currency. Especially not the US. The only thing that could happen is that they underestimate it and it becomes too big to fight it. Also, FB will probably bribe - eh, I mean - lobby some politicians. It works for Intuit :)

JumpCrisscross 6y ago
> no country in the world wants to loose control over their currency You're free, in America, to settle transactions in whatever currency you please. When it comes to taxes or settling debt, U.S. dollars have primacy. But if you want to sell your house in Euros or Bitcoins or bags of glitter, that's always been permitted.
- ChainOfFools 6y ago
  Indeed, though ofc the sale price (for public records) as well as assessed value will still be calculated in the local state issued coin.
I_am_tiberius 6y ago
I think it's a misunderstanding that countries lose control. With the introduction of the digital dollar (Libra seems to be only a stable coin == a digital dollar), cash payments will become less popular and at one point governments will abandon cash. With all dollars being digital, governments will be in full control of consumer spending by influencing interest rates that are charged by the Libra system. Without being able to leave the Libra system, you'll be forced to buy goods when interest rates decrease.
- save_ferris 6y ago
  > governments will be in full control of consumer spending by influencing interest rates that are charged by the Libra system How can governments be in full control if there's a private partner/consortium/whatever that controls the technology? This seems akin to the whole "drive for Uber and be your own boss" argument.
  - I_am_tiberius 6y ago
    Sorry, obviously "full control" is the wrong expression. But you get my point I guess.
    - save_ferris 6y ago
      That’s just it though, I disagree that governments will have “full control” in that situation, they can only lose control as this technology becomes adopted. They gain nothing while taking on a private partner, one that has an abhorrent history of privacy abuse. It’s so hard to see the benefit for anyone other than Facebook in this
      - I_am_tiberius 6y ago
        Please consider that just because Facebook is allowed to trade dollars in a digital way, it doesn't mean that they can produce dollars. Production is still in the hands of governments. Privacy wise I'm full on your side. But I still think it's also a benefit for governments - they'll lose on one side but gain on the other. Cash is a burden for them.
        save_ferris 6y ago
        Maintaining cash currency will cost the US roughly $877M[0], out of the Federal Government’s $4.7T budget, or 0.01% of the Federal budget. So in your view, sacrificing people’s privacy by giving this sensitive data to Facebook and ceding the government’s distribution control for what amounts to minuscule savings is worth it? Just for scale, if you were operating a $100k budget, you’d be saving $10 while giving a private company immense control of the financial system. How do you justify that? 0: https://www.federalreserve.gov/faqs/currency_12771.htm https://www.federalreserve.gov/faqs/currency_12771.htm
        I_am_tiberius 6y ago
        Sorry, I don't understand your answer as I'm clearly against Facebook's strategy. And so are you as I understand.
- hogFeast 6y ago
  Correct...in parts. Afaik, this is primarily a platform for zero-cost transactions (and if you live in an emerging market, a way to stop your govt stealing from you). But you wouldn't need to charge rates on the Libra system...you still implement monetary policy as before because Libra is just a currency backed by other currencies. Given the currency shares announced though, it would potentially make monetary policy harder for non-US nations (i.e. EUR/GBP/JPY). My sense is that wouldn't be catastrophic but it would reinforce the position of the dollar/US monetary policy (as an example: if I am the ECB, I try to cut rates to zero then everyone just buys Libra until banks run out of money and force me to hike...this can work in reverse too where a big shock to the US economy can transmit through Libra globally...so functionally I think it would be very like a gold-exchange standard i.e. 1920-1970 but with USD as the exchange currency). Btw, this is why you saw European nations come out so strongly against this. SDRs are basically the same thing but the IMF overvalued the EUR in the basket...this is why central banks don't really use SDRs. Libra is kind of the opposite where you have a realistic weighting of EUR which is obviously less good for the EUR (although, again, no-one uses SDRs and they haven't helped the EUR become less of a bad currency). ...but yeah...it definitely is complex because the needs of consumers/corporates for low-cost transactions runs counter to the needs of monetary policy. I can see why govts oppose this and the likely end point is some better solution to reduce transaction costs (which Libra essentially is...but trying to create a reserve currency was...not a good idea...ppl have been trying this for centuries).
vishnugupta 6y ago
> I’m almost certain that no country in the world wants to loose control over their currency. Isn’t that already the case with EUR currency? My understanding of the debt crisis in Greece is that it was partly due to the fact that Greece couldn’t print their way out of debt because only ECB can create EUR.

JumpCrisscross 6y ago

> no country in the world wants to loose control over their currency You're free, in America, to settle transactions in whatever currency you please. When it comes to taxes or settling debt, U.S. dollars have primacy. But if you want to sell your house in Euros or Bitcoins or bags of glitter, that's always been permitted.

ChainOfFools 6y ago
Indeed, though ofc the sale price (for public records) as well as assessed value will still be calculated in the local state issued coin.

I_am_tiberius 6y ago

I think it's a misunderstanding that countries lose control. With the introduction of the digital dollar (Libra seems to be only a stable coin == a digital dollar), cash payments will become less popular and at one point governments will abandon cash. With all dollars being digital, governments will be in full control of consumer spending by influencing interest rates that are charged by the Libra system. Without being able to leave the Libra system, you'll be forced to buy goods when interest rates decrease.

save_ferris 6y ago
> governments will be in full control of consumer spending by influencing interest rates that are charged by the Libra system How can governments be in full control if there's a private partner/consortium/whatever that controls the technology? This seems akin to the whole "drive for Uber and be your own boss" argument.
- I_am_tiberius 6y ago
  Sorry, obviously "full control" is the wrong expression. But you get my point I guess.
  - save_ferris 6y ago
    That’s just it though, I disagree that governments will have “full control” in that situation, they can only lose control as this technology becomes adopted. They gain nothing while taking on a private partner, one that has an abhorrent history of privacy abuse. It’s so hard to see the benefit for anyone other than Facebook in this
    - I_am_tiberius 6y ago
      Please consider that just because Facebook is allowed to trade dollars in a digital way, it doesn't mean that they can produce dollars. Production is still in the hands of governments. Privacy wise I'm full on your side. But I still think it's also a benefit for governments - they'll lose on one side but gain on the other. Cash is a burden for them.
      - save_ferris 6y ago
        Maintaining cash currency will cost the US roughly $877M[0], out of the Federal Government’s $4.7T budget, or 0.01% of the Federal budget. So in your view, sacrificing people’s privacy by giving this sensitive data to Facebook and ceding the government’s distribution control for what amounts to minuscule savings is worth it? Just for scale, if you were operating a $100k budget, you’d be saving $10 while giving a private company immense control of the financial system. How do you justify that? 0: https://www.federalreserve.gov/faqs/currency_12771.htm https://www.federalreserve.gov/faqs/currency_12771.htm
        I_am_tiberius 6y ago
        Sorry, I don't understand your answer as I'm clearly against Facebook's strategy. And so are you as I understand.
hogFeast 6y ago
Correct...in parts. Afaik, this is primarily a platform for zero-cost transactions (and if you live in an emerging market, a way to stop your govt stealing from you). But you wouldn't need to charge rates on the Libra system...you still implement monetary policy as before because Libra is just a currency backed by other currencies. Given the currency shares announced though, it would potentially make monetary policy harder for non-US nations (i.e. EUR/GBP/JPY). My sense is that wouldn't be catastrophic but it would reinforce the position of the dollar/US monetary policy (as an example: if I am the ECB, I try to cut rates to zero then everyone just buys Libra until banks run out of money and force me to hike...this can work in reverse too where a big shock to the US economy can transmit through Libra globally...so functionally I think it would be very like a gold-exchange standard i.e. 1920-1970 but with USD as the exchange currency). Btw, this is why you saw European nations come out so strongly against this. SDRs are basically the same thing but the IMF overvalued the EUR in the basket...this is why central banks don't really use SDRs. Libra is kind of the opposite where you have a realistic weighting of EUR which is obviously less good for the EUR (although, again, no-one uses SDRs and they haven't helped the EUR become less of a bad currency). ...but yeah...it definitely is complex because the needs of consumers/corporates for low-cost transactions runs counter to the needs of monetary policy. I can see why govts oppose this and the likely end point is some better solution to reduce transaction costs (which Libra essentially is...but trying to create a reserve currency was...not a good idea...ppl have been trying this for centuries).

vishnugupta 6y ago

> I’m almost certain that no country in the world wants to loose control over their currency. Isn’t that already the case with EUR currency? My understanding of the debt crisis in Greece is that it was partly due to the fact that Greece couldn’t print their way out of debt because only ECB can create EUR.