A "ban" doesn't need to be technological.
You pass a law. Most people don't break the law.
You make it illegal for banks to transfer to known Libra things. You audit people. You apply big fines.
Murder is illegal but that doesn't mean nobody can commit murder.
Libra is hardly morally questionable. If you want a better comparison take (software) piracy.
Piracy is illegal and while I'm sure Steam, Spotify, and Netflix has reduced it a lot it is still thriving and many people break the law if not daily at least monthly.
Best thing you can do is to make a law that forces banks to prevent payments to known Libra sellers, but again if there is value in Libra this hardly makes a difference.
For one unless there is official list of every entity that sells them and they get instantly blocked you could just buy them before they get blocked. Secondly you could just use PayPal to transfer the money (first to your PayPal wallet and then to the seller), EU is not crazy enough to block PayPal without an alternative in sight.
Secondly take any gray-market on the Internet. On these markets you can already use a range of payment methods starting with freaking Starbucks Gift Cards to just plain old cash.
Yes, yes, just like most laws it will keep the honest people honest and we can assume that at least in the start that will be most of the population, but such a law would be so trivial to bypass that if there is any benefit of having some Libra people will have it and outside of completely breaking privacy of EU citizens there is nothing they can do about it.
>Best thing you can do is to make a law that forces banks to prevent payments to known Libra sellers, but again if there is value in Libra this hardly makes a difference.
It does make a gigantic difference. They don't need to ban all of the Libra exchanges, just the big and knowledgeable ones, and go around banning anything that goes too big, so that people who want to retrieve EUR from Libra need to search a lot and comb through exchanges to see who's trustworthy. That makes using Libra a hassle, and if there's not a lot of adoption of Libra and it doesn't reach a critical mass, the currency becomes useless.
> if there is any benefit of having some Libra people will have it
That's a big if.
You skipped the part where I detail how underground markets already get past this. To reiterate here: banks can ban money transfers to the biggest exchange, but people can simply use PayPal, Bitcoin, Cash, or even gift cards to transfer the money.
Sure this will drop the most casual of users off, but again if there is value in Libra that hardly matters.
>That's a big if.
You need to realize that because someone is poking holes in what you believe doesn't mean they are completely against you. I have and probably will not advocate for anyone to use Libra. I have no Libra and I probably never will have any. I don't trade with any currency, I'm only interested in Bitcoin and other blockchain currencies as technology enthusiast.
I feel like people on the Internet often forget that the world isn't black and white. Just because I don't agree with one of your views doesn't mean I don't agree with the rest.
With digital goods such restrictions aren't nearly as big of an issue. You can trade (semi-)anonymously with very little fear of getting caught. You can easily disguise your country of origin and even hold the money off shore, all of which would have required a lot of capital to setup with actual gold in the 1930s.
Besides the context (and the legal aspect), they are the same act, homicide with intent. Their morality seem to be different depending who you ask.
And as for Libra being made illegal, I don't see what value it provides in EU to make it worth breaking the law.
Death penalty is not moral. How you got this out of my message is beyond me.
Killing enemy soldiers to defend your life or land is justifiable. They are trying to destroy you. But I guess this is weird from American point of view (I'm just assuming since I don't think anywhere else has death penalty still in use and other countries haven't been involved in war in foreign countries for past two decades), but killing people who don't look like you in their own land because they are firing at you because you have invaded them is actually immoral in more ways than one.
Maybe in Germany, most people will stay away from it but in Bulgaria, Spain, Italy etc. - in places where people are more "relaxed" about the law enforcement will not miss business opportunities just because their rich neighbours can afford to miss it.
If audits materialize they, the users will simply set-up or use proxies to deal with it. Someone in the USA will set-up an Libra-Bitcoin-Euro-USD exchange for example and the transactions will go through these. I can already see an Ukrainian-Russian-Bulgarian-Romanian-Turkish partnerships to run these operations. Europe is a mess, laws and enfrcement capacity is very different in every country and countries are in multiple clubs(in EU, in EEA, in customs union, in Eurozone, in schengen, not in EU but confirms to EU, not in Eurozone but the currency is pegged to Euro, in EU but not NATO, in NATO but not in the EU. It doesn't have an end) giving differnt rights and different obligations to people in each country and even messier when they are not in their own country or hold multiple citizenships.
The forming of a financial underworld in the Eurozone is pretty doubtful in my mind. Sure, enforcement varies country by country but if this would get a big enough problem we also have international efforts in the EU to get rid of it. Worst case somebody gets a data dump in lieu of Swiss tax evasion dumps on CDs a few years in and the laws against it get even stricter.
Not true. It depends on the country, in the UK you can buy SIM cards from wending machines that work straight out of the package and it's not he only country that does not require ID for SIM cards.
Anyway, even if your identity is tied to your Facebook account, what stops you from creating an American or a Filipino Facebook account? Phone number? You can buy a phone number online. You can also buy a verified Facebook account too.
Let's say that Facebook somehow starts operating as strict as a governmental body and checks everything, what stops you from buying Libra from an American or a Mexican? I haven't checked the details but this Libra thing doesn sound like Steam game money but like cryptocurrency, so they probably cannot do whatever they want just like that.
The theme here is that Facebook has lost the trust of too many important people, and maybe they just want to hurt what looks like another enormous American tech company that has been too careless and too aggressive.
They would just have conclusively proven that they ignore KYC regulations and are running the biggest money laundring operation ever
Let's not forget that the euro is a stable currency compared to most other markets libra wants to compete in (the developing world). What is in it for me as a consumer? Atleast the Eurozone has rules in place to protect my savings (up to 10.000 euro[0]).
Libra brings nothing to the table in terms of transaction speed or costs either (for the consumer atleast).
1 https://www.ecb.europa.eu/explainers/tell-me-more/html/depos...
(No, I don't get it either)
Not quite, in the case of Libra. Only a handful of companies control the nodes. Which makes it relatively easy to enforce a ban.
Sadly it is not uncommon to see people going to jail for stealing a few chicken because they were hungry, while many company owners and politicians hardly face any jail time for their proven corruption affairs.
Being popular and law seldom come hand in hand.
Stealing a chicken has a clearly defined victim and stealing, not even piracy or patent infringement is well understood and universally condemned action.
It's about time we all disabused ourselves of the libertarian utopian dream that just because cryptocurrency is on a distributed ledger than governments can't control it. "How do you stop people obtaining it and using it through their buddies on the internet" - quite simply, by telling them they'd go to jail, or get a hefty fine, for doing that.
Companies are even easier to control than people because their whole existence is made possible by laws and regulations of governments.
And this is how we know the "small government" slogan is an absolute sham.
That method does not work very well for e.g. weed.
France and Germany can entertain IP blocking these services and put laws in place for citizens to not use it. Interestingly though, this is exactly what a free country should not do I guess.
> Interestingly though, this is exactly what a free country should not do I guess.
I think a free country should be able to put restrictions in place to avoid foreign profit-driven corporations to interfere and manipulate their economy.
Black markets can never be prevented.
The question is whether people would want the goods. Is there a black market for Zimbabwean dollars in the USA, for example?
Libra is pointless in Europe. In fact, it's pointless anywhere there is a developed financial and payment system.
The battleground is therefore places like Africa or South and South East Asia, and there's a reason China has quickly announced an alternative.
In the end, it doesn't really do much but slow things down for some users or add extra steps to the process of extracting value out of Libra as long as somewhere is willing to run a quasi-legal exchange. There is also the option to threaten Facebook/Libra with sanctions if accounts can be proven to have been made/facilitated for Citizens.
Another possibility is the requirement to maintain access to the blockchain for mining and analysis against other financial activity the respective governments have the capability to audit.
Hence is the danger of something like Libra combined with Nation State scale actors.
The common person on it may not see anything but addresses, but given enough out-of-band info, the potential for government use as surveillance (or any large organization really) is far too large.
Libra is several things; most of which already exist in other forms in the EU. That makes it hard to block as a whole. At least not without also impacting a lot of other companies and people doing similar things because the law should apply equally to all.
First of all, it's a permissive blockchain similar to e.g. Ripple and Stellar, both of which are used by companies in the EU; some of which are fintech companies actively collaborating with the German, French and other governments. Some of the coins on these platforms are stable coins for euros, dollars and other coins. Some of them represent bonds (e.g. a German company called Bitbond) and some of them of them are new coins. Some EU companies even offer credit cards backed by crypto currencies (e.g. Wirex is based in the UK and offers it's products to people in Germany and elsewhere).
Then there is the notion that quite a lot of EU citizens own and actively trade in bitcoin, eth, and a wide variety of other coins already. Why would a Libra coin be any different just because Facebook is behind it? The scope of what they can ban here under existing laws seems unclear. Making new laws takes ages and has so far not really happened. Most blockchain companies operate under interpretations of the existing laws. My guess is that market making for Libra like Facebook is planning would probably be subject to regulation and also be problematic in many other countries (like the US).
Then there is Move, the language used for implementing smart contracts in Libra. That too already exists in the EU market in the form of loads of companies doing all sorts of things on top of mainly Ethereum and using Solidity, which is technically similar. You can argue about how useful these things are but there is a lot of investment happening in startups doing things with block chains and smart contract. A lot of that is happening with permission of the relevant authorities. E.g Bitbond was approved by the German Bafin.
So, singling out Facebook to do any of those things does not sound like it would be very practical from a legal point of view.
What they can do is take action if Facebook starts promoting and trading it's own currency within Facebook which I'm guessing would require a bank license or at least expose them to financial regulation.
My guess is that Facebook will instead launch Libra with a simple stable coin backed by euros and dollars and post pone launching their own coin. This would make it more similar to what e.g. Apple Pay and Android Pay enable: a simple online wallet that users may use for paying for things online. The fact that there's a blockchain involved is maybe technically interesting but not necessarily a problem. I'm guessing they'll also be exploring using smart contracts for a few things. Facebook as a payment provider would of course be subject to the same kind of rules that Apple, Google, and others have to deal with.
A further complication might be that Facebook is isolating Libra into a separate foundation. That might shield them legally and allow them to push some boundaries. One thing they might eventually do is launch Libra the coin only in certain markets. They were talking a lot about third world countries in the original announcement.
Other blockchains have not been blocked outright because they don't pose a threat and are developing slowly, so EU countries are working towards more or less sensible regulations. Facebook has far more power to drive adoption, so in order to avoid a situation where Facebook screws up (intentionally or unintentionally) they block the currency preemptively.
> quite a lot of EU citizens own and actively trade in bitcoin, eth, and a wide variety of other coins already
Relatively, not that many. Also, those currencies are being mostly used as investments, not currency.
> Why would a Libra coin be any different just because Facebook is behind it?
Precisely because Facebook is behind it: a foreign company, known to bypass and ignore regulations, with interests that do not necessarily align with those of the citizens, and with zero accountability.
> startups doing things with block chains and smart contract.
As long as it is not a global currency owned by private corporations it's ok.
> This would make it more similar to what e.g. Apple Pay and Android Pay enable
A different coin is very different from Apple and Android Pay. Payment systems are very different from coins.
France and Germany are being quite vague about what exactly they will block, what the scope is of that, or even how they imagine this would work. Also, Facebook itself has not been very clear about their actual intentions or those of the Libra legal entity that is supposedly governing all of this. Depending on how you read their announcements, Libra the coin might be considered as an experimental/optional part of an overall solution or vision that could also involve euro/dollar tokens (just like others trade on Stellar, Ripple, etc.).
Sovereign monetary policy goes out the window if Libra takes a serious hold in society. The only solution to that is a decisive ban on it.
When reading a lot of these arguments, a lot of them seem to me to be very “white box” defending the end result against legislation by arguing about the internal implementation.
Facebook is creating a financial instrument. I’m a bit surprised regulators couldn’t use _existing_ legislation to prevent them from using it in a country.
The financial instrument part of it is getting all the attention here even though it's hardly essential to Libra (the platform as a whole). That too is not new and they'd have to apply existing legislation in a way that is consistent with how they are already applying it.
That's the key point. Failing to do that would create a lot of problems; which automatically translates into court cases and judges deciding on what is the correct way to do this rather than politicians. That will take many years. Existing legislation is the only legislation that matters because creating new laws or emergency laws would be very hard; especially considering that nobody seems to agree on what should actually be in those laws.
So we're getting a vague "we don't like that sort of thing" in response to a deliberately vague press release a few months ago that wasn't being very specific on a lot of things. It's a political statement not actually backed up by concrete plans to change legislation or instruct authorities to interpret it in a certain way. It's a hollow threat.
Of course you have to see this in the context of the bigger picture of tax dodging and privacy violations associated with big US tech companies operating in Europe and the public pressure to do something about that. That's what this is. Political posturing.