On Facebook’s Libra Currency : “I agree with Donald Trump’s Stand”
It is not often that I feel like agreeing with a world leader / game-show host; but I do. But only on the threatened introduction and launch of the Facebook Libra currency.
Payments are complex and there is a huge need for supervision and regulation. Especially, when things start to get challenging or when they go wrong. Our work, involves helping companies to do the right things, so we know just how tough this can be for every company, irrespective of experience.
So, we should all agree with Donald Trump (a shudder here), and for a couple of key reasons we must all make sure that payments and Banking are performed correctly and legally and appropriately licensed and to properly governed organisations to avoid:
A. An ‘Idiocracy’ future – with Facebook et. al.
B. The Tax / Government issues
In the 2006 film ‘Idiocracy’ – ‘Joe’ is transported to a dumbed-down future, where the President of the USA doesn’t read or write – and influence stems from a ‘fizzy drinks’ maker and TV game-shows. Should we really cede control to social media companies?
The companies behind Libra, that form the Libra Association , are giants in their own industries . They wipe-out competitors, and direct our lives with their products/ services. As citizens, are we happy for this Facebook-led association of big business to develop and deploy a crypto-currency using blockchain distributed ledger for its rails. Do we want them to harvest all of our shopping and payments information. Do we want them to collect more ‘lifestyle data’, which they will inevitably sell to others with or without our permission?
We know who run these ‘Libra’ companies, but should we worry that they have complex global corporate structures that collect, lose, sell, and abuse our data today, avoid paying taxes, and evade government enquiries. Even this month, Facebook was fined $5billion. But it took years and cost multiple $millions to do.
We should worry also that the initial Libra documentation shows a big intention to control, maybe even to ‘own’ our ‘identities’.
The Tax / Government Issues
We can all dislike taxes, but:
– They are necessary to pay for welfare, social, health service, community, law enforcement etc. But also to watch over and regulate businesses.
– Taxation also comes from corporates including from Banks and other regulated businesses.
– The tax affairs of the Libra ‘gang’ are very nefarious and hidden in the most tax efficient jurisdictions.
– Regulation also requires companies to have capital, to safeguard money and look after ‘people’, to have an ombudsmen and compensation schemes…… and much more.
We all want faster, cheaper, more secure and convenient payments and banking: but we should also want our money (and that of our aging parents and our children etc.) looked after, not to lose everything overnight, not to have our data misused or lost (again). We need oversight, someone to challenge those who look after our money and we must have laws to protect us from Facebook (et. al.). They might (perhaps) be able to deliver ‘faster’, ‘cheaper’, ‘convenient’ to us; but we have to look at the complete picture.
Our leaders should make sure that whoever wants to start operating financial services and other regulated sectors should keep them within strongly regulated risk and operating frameworks.
We should also worry about:
a) A move towards single global payments and currencies. Would this be linked to say the USD / USA? (Where is Facebook? How do you complain? Will you get an answer?)
b) When governments lose their control over their fiat currencies (e.g. Italy and Greece) will they start to lose control of economies, finances and then political decisions. To Facebook?
c) Will bond markets, currency markets, labour movement, currencies, international payment networks, Interest rates, tax jurisdictions, insurance, pensions be next?
d) Governments need time to adopt/change complex issues properly and sometimes we/they need to understand the ramifications before we re-boot 400 year old industries.
e) Does currency union lead towards political union……?
For the first time in my life, I really want regulation, control, governance, transparency and oversight. This is a BIG issue.
Go for it Donald!
Bill Trueman is a leading payment, risk & fraud specialist who provide payment fraud prevention consultancy services to card issuers, banks, and business organizations worldwide. For more information one can visit his website at RiskSkill, apart from this he is also joint chief executive of AIRFA.