[Despegar]

Haven't read any of the news about how this currency is supposed to work, but if it lets anyone bypass the SWIFT system then the US should probably ban it too. Being able to sanction anyone is a powerful tool to give up to Facebook of all companies.

[itsnotlupus]

I expect we'll find out that Libra's default set of trusted validators will be perfectly willing to accommodate local regulations.

More than that though, AML/KYC and any other checks deemed necessary can occur at almost every point of contact with fiat currencies.

[akozak]

Don't need to wait, they said so.

https://libra.org/en-US/compliance-consumer-protection/#over...

[chvid]

This is still a system on American control even if other currencies than USD are supported.

One thing is that countries may be cut off from swift. That limits money transfer in and out of the country but the bank transfers within the country would still work. Blocking this could potentially halt the internal money transfers of a country.

[Despegar]

So if a company or person is sanctioned, can Facebook or someone else freeze their Libra currency?

[m3kw9]

The main question is, can Fb print currency

[patrickaljord]

Anyone can build their own wallet, Facebook will offer its own wallet (calibra) but you will not have to use it. tl;dr, they can't freeze your wallet if you're not using theirs. Paypal, visa and coinbase will offer their own and you can build your own.

[modeless]

> they can't freeze your wallet if you're not using theirs

This is false. The wallet just reflects what's in the ledger, and the ledger is controlled by Facebook('s consortium). They can absolutely freeze any addresses they want. Furthermore, they control the currency peg and thus the value of the coin; they can make any address ineligible for redemption and thus worthless. And they certainly will, in the name of preventing fraud and crime and terrorism.

[stcredzero]

This is false. The wallet just reflects what's in the ledger, and the ledger is controlled by Facebook('s consortium). They can absolutely freeze any addresses they want.

Isn't this a transfer of power over the movement of money away from the government, and to a corporate consortium?

And they certainly will, in the name of preventing fraud and crime and terrorism.

Which will result in the US government using those accusations more.

[grey-area]

Isn't this a transfer of power over the movement of money away from the government, and to a corporate consortium?

That’s kind of the point.

[patrickaljord]

This is true of most blockchains though, if a majority of nodes are blocking an address, the coins can't be transferred. Granted, this is more likely to happen with tiny consortiums like Libra.

Do you know how would this work in Libra's case in practice? Would there need to be a super majority to block a given address? I guess the government could force the whole consortium to block an address though.

On the other hand, the government could also use anti-terrorism law to force coinbase and any legal exchanges to ban a certain bitcoin address and any movement from this address. Coinbase already banned all people sending coins to sites such as the dailystormer for example. While this was a private initiative, the government could pass a law to ban people and businesses from sending bitcoins to Iran for example. Hard to enforce I know but scary enough to be problematic (see war on drugs for example).

[zeven7]

If the validators (Facebook, Visa, Paypal, etc) agree (re government regulations), your account can be frozen no matter whose wallet you're using.

[tomp]

The value of a valet is equal to the amount of coins that can be transferred out of it. So if FB&co block transactions you can say bye bye to your “own” valet.

[tim333]

It bypasses SWIFT but only in the way bitcoin and similar cryptocurrencies do already.

[dmitrygr]

statistically, so few people use bitcoin, that one might as well round to zero, so governments do not need to care. FB has 2.5B users whom they can easily manipulate, hence governments care.

[cwkoss]

I don't think governments 'dont care' but rather they are powerless to act effectively against Bitcoin. A ban would legitimize its utility to people skeptical of central banking. Because Satoshi is anonymous, there is no person or team to attack with legal or extralegal coercion. Only way to effectively take down bitcoin is to spend ~$1B building a huge mining operation with the purpose of launching a 51% attack, but even that could be mitigated.

[root_axis]

> A ban would legitimize its utility to people skeptical of central banking

i.e. a tiny irrelevant niche. I don't think banning bitcoin is a good idea, but a ban would be highly effective because nobody cares enough to risk fines or jail time over something they have no use for anyway.

[cwkoss]

A government can ban BTC<>fiat exchanges within their country fairly effectively. A ban on transacting on the Bitcoin network would be extremely difficult to enforce - VPN to a different country and they've lost you. Cyberpunks could still cross borders to cash out, or just purchase digital goods/services.

[root_axis]

> A ban on transacting on the Bitcoin network would be extremely difficult to enforce

1. I disagree. There are many effective methods a government could utilize to enforce a ban on transacting on the Bitcoin network. I could think of many technical examples, like the use of weaponized malware and 0-days to spy on the population and uncover users. Yes, some technical people could evade detection, but most people (including most programmers) would be caught up quickly due to opsec mistakes. There is also violence, which would be very effective unfortunately.

2. Even if they couldn't effectively ban transacting on the bitcoin network, the network itself is useless if the state makes it illegal for businesses to accept bitcoin.

3. Strong enforcement isn't necessary since the masses are already uninterested in blockchain tokens except as a vehicle for speculation. If the government made it illegal most people wouldn't think twice about it. Why bother?

[vinay_ys]

There's a simple way to ban bitcoin. Govts already regulate the banking and payment companies. Govt can compel them to not allow/facilitate exchange of bitcoin for fiat currency or vice-versa. Without banking/payments infra supporting such a conversion (only hand to hand cash transfer and exchange conversion by person to person transfers would be possible) which will be very small and network will be dead soon. But obviously govts didn't do that and hence bitcoin has so much usage and hence such high value.

[ShorsHammer]

I use a decentralised exchange to both buy and sell bitcoin, all traffic is routed p2p through the tor network. Binance one of the largest exchanges in the world is building their own DEx too.

Your hypothetical situation is blown out of the water here by existing technology that is clearly very hard to stop. How are governments going with banning torrents?

https://bisq.network/

[tomjen3]

A billion is not much once you get to Pentagon scale budgets and is probably cheaper than going to war with Iran.

[cwkoss]

I am really looking forward to seeing the declassified memos in 30 years where DoD war-gamed ways to take down the Bitcoin network.

[xyzzyz]

Yeah, but those who are sanctioned by governments have much more incentive to use Bitcoin, so the fact that most don't use it is not important, what is important is its existence as an option.

[dmitrygr]

It's not really an option. The hard (and VERY low) cap on transaction volume is a joke. If you think a Bitcoin is actually an option for actual banking for actual people (not just the current set of a few thousand gamblers), you are delusional. The current financial system DOES process more transactions in a millisecond than Bitcoin CAN in a week.

[xyzzyz]

That's irrelevant. People who want to use Bitcoin to evade SWIFT sanctions don't need to do thousands transactions, they only need to do one.

[cossatot]

No need to call anyone delusional.

[m3kw9]

It’s all about if fb can print money and able to compete with USD money supply

[johannes1234321]

Facebook is subject to U.S. legislation. Chinese Bitcoin minors aren't.

Facebook has many users. Each Bitcoin marketplace has only few.