There have been a lot of posts and responses about Libra. The core of it is that FB wants to be an unregulated bank. That is all this whole thing is about. Given the current (and post 2020 political realities?), it is no wonder all the established payment companies tapped out. This effort will be delayed until their is a government structure willing to look the other way. It will also be really interesting to see how this gets rolled out against GDPR and other European laws.
As time goes on, it's increasingly looking likely that it won't be rolled out in Europe[0].
> "Libra is not welcome on European soil," French Economy Minister Bruno Le Maire told reporters the sidelines of the annual meetings of the World Bank and International Monetary Fund
> "Do we want to put monetary policy in the hands of a private company like Facebook? My answer is clearly no," he said
Worth noting however that Facebook could register some entity as a bank and operate the Libra service from there (even sharing offices with Fb, that's not illegal afaik).
They would fall under all possible kinds and manners of banking regulation, but it's viable; many companies originally outside of the fin sector are offering financial services now (notably Orange, the French leading and historical ISP, formerly a state-owned public company).
This would likely result in some tiny fee when crossing in/out of the traditional banking sector (from/to Libra and some regular account or merchant paying system), and maybe when entering/leaving Europe, but would remain largely free for Libra transactions within the EU.
Which, as I see it, is the purpose of said regulation: to protect EU citizens (account insurance up to €100K, rights to certain features like free inter-bank transfers within the EU, etc). Libra unregulated would basically fall to Facebook's unilateral rules for protection and features, and that just isn't acceptable to the EU.
So far as I can tell, (a) Calibra will be a "custodial wallet", i.e. it'll hold the Libra tokens and present to the user a bit like PayPal; (b) they're talking up a Libra-per-currency, rather than the synthetic basket; (c) they're actively at work developing Calibra, in some sense.
To me, it's increasingly looking like they're heading for Calibra as PayPal-but-it's-Facebook. This is a more sane and comprehensible business idea, at least.
Indeed, and thanks for the info. Makes sense, definitely.
Basically just a layer of abstraction like in-game currency in virtual worlds, only this one has some 2.2b 'players' so the in-world PayPal is one hell of an easy way to transfer money?
That's much less sexy from a technological and social standpoint, but it might just be the simplest way to both reach a solution and seduce just enough blockchain lovers for the 'buzz' (best fueled by Controvery®).
When you think about it, people use items as secondary currency to exchange real-world money since forever and a day. E.g casino chips (physical), in-game assets ("virtual" but really we just mean software i.e. codified text, like we'd write score cards in tabletop RPG, or... computer punched cards). Colibra, fundamentally, would be just that...
So much ado about nothing if it turns out to be such a custodial abstraction. Now I expect Colibra lootboxes and gift shops in WhatsApp and Instagram! — once you've seen people spend hundreds on pixels in games, cosmetic shaders to embellish their avatar, you know there's no limit to human commerce. Probably Facebook's endgame with Libra if you ask me.
Well the only thing that is clear that people seem to be a bit hand wavy about what exactly is being blocked and why it is being blocked. Lets clear that up a bit.
Libra is several things, most of which will be hard/impossible to block without new laws and also blocking a large amount of currently legal things. So, blocking all of it is not a thing.
First it's an oss blockchain platform. It's similar in design to several other blockchain platforms; none of which are currently banned anywhere. Banning software is (mostly) not a thing.
Once it gets to a stable state, somebody will fire up some nodes and a Libra network comes into existence. If other blockchains are any indication, there's a good chance there will be multiple of these (e.g. testing and public). Blockchain networks don't get commonly blocked and you can legally connect to most blockchains out there from most countries. Blocking blockchain access is not a thing.
Then it is a legal entity based in Switzerland with representatives from lots of companies (though minus a few of course as of a few weeks ago). This too is nothing special. Doing business with, being a member of, or interacting with this legal entity is not subject to blocking either.
Then there are the countless financial products, tokens, etc. you can build on top of Libra, most of which are going to be similar to other stuff out there and many of which are not currently illegal or blocked in the EU or the US.
One of those things is the Libra coin. As such coins don't get blocked but the organizations that create them are subject to legislation. The controversial thing about Libra is related to how Facebook intends to implement mechanisms for controlling its value. These are in scope for legislative action.
Once all this is up and running, Facebook plans to integrate some kind of wallet type solution to do payments into their products. That would be similar to Paypal, Android Pay, WeChat, and other stuff in this space. Payment solutions as such are fine as well. Payment solutions using some kind of stable coin are also fine. Several fintech companies already do this, legally.
So, Facebook and the Libra foundation have quite a bit of wiggle room to make most of the above a reality. Yes there would be legal hurdles. The only thing that stands out is Facebook's intention to do market making (via the Libra Association) this is the bit that is controversial. When politicians say they want to ban Libra, what they are saying is that they want to ban all of it because of this market making. The reality is that they will likely try to create some legal hurdles for the market making. Facebook can then choose to work around those.
E.g., you could feasibly implement some alternate coins (simple euro and dollar stable coins like already exist on exchanges) and Facebook has already indicated that they are thinking of doing exactly that.
IMHO it is entirely likely that Facebook may give in to the political pressure to not do this given that they already are under pressure on other fronts. This would happen before they get blocked. But if they push through with this, it's very likely that the legal and political fights around this will be very lengthy. Legislation around this topic will be slow and translating the uninformed but widely spread sentiment "we don't like this" into concrete action is not likely to happen fast.
