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Having custody of your own assets rather than depositing them in a bank is a totally different paradigm

The obvious Facebook concerns aside, digital money that the owner can actually control is the problem.

Bitcoin was originally envisioned as private banking. No one could stick it’s nose in your business. Facebook’s Libra? Forgettaboutit.

Privacy – there will be none, this is a Facebook/CIA project. Control – It’s extent is yet to be seen. Don’t get your hopes up.

The point of digital currency from a government/bankster perspective is to control your “money”. The bank wants to charge you to store your electrons. Interest? That’s funny!

Everyone wants to know your business. There will be no “crypto”.

The government wants banks to be able to shut you off at the flick of a switch. The bank and the government want to be able to give you haircut when things get bad.

This is a war on you and your cash.

https://www.bnnbloomberg.ca/guardians-of-money-bristle-at-zuckerberg-s-new-financial-order-1.1277277

Alastair Marsh

–With assistance from Michelle Jamrisko.

Facebook Inc. was hours away from the formal announcement of its ambitious foray into financial services, but French Finance Minister Bruno Le Maire was already broadcasting his discontent.

“It’s out of the question’’ that the social-media giant’s digital money compete with sovereign currencies, Le Maire said.

That was just the first shot in a torrent of criticism and skepticism from policy makers around the world. U.S. House Financial Services Committee Chair Maxine Waters promised an aggressive response from Congress. Former European Central Bank Vice President Vitor Constancio called the initiative “unreliable and dangerous.”

Led by the social network with more users than the combined population of China and the U.S., the project represents a potential challenge that the guardians of money have never faced: a global currency they neither control nor manage. And while the megabanks and their regulators face no short-term threat to their command of finance, advocates of cryptocurrency say the future has arrived and that there’s no turning back.

“It is the beginning of a new financial system where current gatekeepers are substantially less relevant,’’ said Joey Krug, co-chief investment officer at Pantera Capital, founded in 2013 as the first U.S. investment firm focused on Bitcoin.

Called Libra, Facebook’s new currency will launch as soon as next year. It will initially be used for sending money among friends, family and businesses through the Messenger and WhatsApp services and then be used for routine transactions.

Facebook founder Mark Zuckerberg’s ambitions extend beyond simply minting a new coin. The Libra token would contribute to a fairer world, where those now excluded from the banking system would have ready access to cheap and easy payments and financial services, according to a company white paper.

Libra is the latest example of how tech companies including Apple Inc and Amazon.com Inc have ventured into the financial industry, offering everything from payments to money management and lending. While finance currently makes up a fraction of their business, giant companies with huge customer bases have the potential to trigger rapid changes in the industry and introduce new risks, according to a report Sunday by the Bank for International Settlements.

“Technology is changing the basis of competition,’’ says Huw van Steenis, senior adviser to Bank of England Governor Mark Carney. “It’s tearing up walls between businesses. It’s not just Facebook trying to do a currency.’’

Moving into the heavily regulated financial-services industry via cryptocurrencies, which are seen by many officials as nothing more than a conduit for financing illicit activities, Facebook has shown little reluctance to lessen its confrontation with authorities…

Meanwhile, Waters said Libra is “like starting a bank without having to go through any steps to do it,” and that it’s seeking to “compete with the dollar without having any regulatory regime that’s dealing with them.”

While Libra is designed to be less volatile than cryptocurrencies like Bitcoin and is backed by a basket of securities and traditional currencies, some question how a technology company will interact with the monetary system. “I’m not entirely convinced that a tech company, at the end of the day, can be held accountable,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore.

There are still many questions about how it will operate and its success is far from guaranteed. Yet the endeavor is being taken seriously by the financial-services industry because of Facebook’s scale and its already vast impact on the world.

While Facebook is now trying to sign up banks to the association governing the token, its new system is a challenge to banks that often act as middlemen in virtually all transactions, according to Charles McGarraugh, a former Goldman Sachs Group Inc. partner who has moved into the digital world as head of markets at cryptocurrency-wallet provider Blockchain.com.

“We are witnessing a re-orientation of financial services,’’ said McGarraugh. “Having custody of your own assets rather than depositing them in a bank is a totally different paradigm and a superior system to the too-big-to-fail construct that dominates the market now.’’

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