Photo by Glen Carrie on Unsplash
Even though major partners have abandoned their partnership with Facebook in Libra – its digital payments scheme – the social giant is undeterred.
Facebook claims its digital coin could help people who don’t have access to banks and could decrease costs in global money transfers. But in the big picture, Libra poses big dangers.
Facebook had planned its launch of Libra by June in 2020.
Facebook lost partners – from Visa to Mastercard at least temporarily – after its mint-currency plan drew fire from global regulators and public officials.
High level of scrutiny
U.S. Senators told the financial firms that they likely would encounter “a high level of scrutiny from regulators.”
Three U.S. officials – who have little in common – President Trump, Federal Reserve Chairman Jerome Powell and Rep. Maxine Waters (the Democrat chairwoman of the House Financial Services Committee), have each been critical for very good reasons.
Money launderers and terrorist financiers were cited as problematic by the U.S. Treasury Department.
Elsewhere, for example, French Finance Minister Bruno Le Maire warned Libra is a threat to governments’ “monetary sovereignty” and would not fly in the EU.
Out-of-touch CEO
In response, Facebook CEO Mark Zuckerberg has been weak in terms of public relations. He comes across as out-of-touch as the leader of his company.
Facebook’s brand credibility was already in question following heavy criticism over its privacy practices and political bias.
There are many documented risks about Facebook’s poor management and citizenship.
Data scandals
That’s why there have been calls to regulate Facebook in the wake of its scandals affecting the personal data of its users (e.g. The 21 (and Counting) Biggest Facebook Scandals of 2018).
“There will be more regulation of the tech sector, things like privacy … there should be, at some point, federal regulation that relates to that,” Gates said in a published report.
Facebook’s dismal track record in data and consumer protection is ominous and it raises serious red flags about terrorist financing and money laundering.
Not only would it endanger consumers and law enforcement, my sense is Facebook’s dubious plan would serve as a catalyst for antitrust risks and would emasculate global financial stability.
Undermine currencies
Libra would undermine stable currencies. Nations would likely surrender vital control of their economies and lose their monetary sovereignty.
Monetary systems require regulation for financial stability and control.
Who wants to depend on Facebook after its voluminous scandals from unreliable lack of ethics and due diligence?
Facebook would not be accountable to central bankers or governments.
Freedom of choice
This does not mean nations should prevent their citizens from having freedom of choices nor should they rebuff financial services efforts in technological developments.
Access to banks and lowering of costs in global money transfers are admiral ideas.
But any significant changes in currency-monetary systems require stability made possible by regulation in a legal framework.
It must begin with regulations of Facebook and other tech companies.
From the Coach’s Corner, more on Facebook:
Once Called ‘Stubbornly Childish’, Facebook Gets Worse –Facebook continues to incur the wrath of critics. This includes a six-point indictment by a leading professional publication, AdAge.com.
Winners and Losers in Facebook’s Invasion of Google’s Turf – The world was buzzing about Facebook’s temporary achievement over Google. Harness the power of Facebook, but don’t let it make your Web site irrelevant.
Aside from Privacy, Security Issues — Facebook is a Threat 2 Ways –Why Facebook is becoming more of a threat in marketing. Use due diligence to capitalize on Facebook.
Facebook Privacy: Advice for Job Seekers and Employers – The practice by some companies to require job seekers to reveal their Facebook passwords so they can spy on the applicants’ private information prompts a couple of Biz Coach reactions — for both job applicants and employers.
Despite Missteps, Facebook Succeeds in its Product Life Cycle – For a long time, Facebook appeared approaching the end of its product life cycle. But its revenue earnings continue to increase despite its privacy scandal and other issues.
“Facebook is not your friend, it is a surveillance engine.”
-Richard Stallman
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