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by TomMckenny
2562 days ago
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While the grandparent post may have misstated the threat, there is a real danger here. It is not just a new style of credit card. And while it will act like a bank, it appears it will dodge regulation and consumer protection (limited as it is) under the word "cryptocurrency" or some other neologism poorly understood by the public and legislators. Will Libra deposits be covered under FDIC? Will it be subject to closures when there is a panic? What rights do depositors have in the event of wrongful transactions? So it's great if it allows people under repressive or kleptocratic governments more security and freedom. It's fine if it's just a toy to send money to friends. But it's another thing if it's just a bank with an unstated "depositor beware" philosophy. It'd also be a lot less worrisome if the company implementing it had a bit better reputation. |
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That's not Libra's use case. It is pegged to other assets; it is meant to be transactional, not held as a store of value.
>Will it be subject to closures when there is a panic?
Why do you consider that a good thing? Would you really rather have your money held by some bank in Argentina then?
Besides, the idea of cryptocurrency is that the money supply is not governed by policymakers, which will help to avoid the conditions leading to those kind of panics. In the case of Libra, it's pegged and its monetary policy is more decentralized than that of a central bank.
>What rights do depositors have in the event of wrongful transactions?
What rights do you think that you have today? You're being subject to wrongful transactions all of the time in the form of outrageous banking fees. Make no mistake, the cost of "wrongful transactions" is being foisted upon you, plus much more in the bank's own interest of making money.