Facebook’s worrying move to banking – Rob Thompson
Hasn’t Facebook got enough problems? The social media giant is already facing existential threats on all sides. For example:
- It’s still dealing with the fall-out from Russia’s use of its network to interfere in the last US election
- Investigations are ongoing for massive privacy violations and anti-competitive practices.
Instead of going into a defensive crouch, Facebook is still thinking about extending its dominance. It hopes to achieve this, of all things, creating its own global currency. It recently announced the creation of “Libra”. This is a new digital currency chat is backed by 28 other big firms including Visa, Mastercard, PayPal and Uber, and which is due to launch next year. Mark Zuckerberg’s grand vision is that Facebook’s 2.4 billion users will be able to:
- shop,
- make payments, and
- transfer money to other users simply and cheaply using a linked app, Calibra.
In short, Facebook wants to take a leading role in banking. Which is unfortunately, an industry even more hated than the tech giants.
Along with vast revenue opportunities, Libra also offers a chance for Facebook to advance its basic aim. This is the harvesting of endless data, which can then be monetised. Imagine it. Facebook will know not only who you’re talking to and what you’re clicking on, but also all the companies and people you’ve paid money to. That’s only the tip of the iceberg.
Banks have a responsibility to prevent money-laundering, terrorist financing and tax avoidance. Can we trust Facebook to do that? The regulation of money is a matter for national governments. Libra will allow a group of corporations to do it instead. They can bypass central banks and undermining currency systems (especially those of poorer countries).
Facebook too often acts as a would-be sovereign Power. Any company big enough to start its own currency is just too big.
Published at Fri, 05 Jul 2019 18:39:37 +0000
