The more companies leave the initiative the more centralized it becomes and the less its trust model is valid. If only Facebook remains it isn't any different than a simple virtual currency (like the discontinued Facebook Credits).
And to preempt the argument that visa and mastercard aren't trustworthy - there is an inherent trust that most people give to big companies because their processes and checks and balances developed over years to be robust - usually from having to handle lawsuits and regulations which small companies rarely do.
This also opens the way for other more obscure partners to enter the association. That will probably determine its future course
By initially supporting Libra, they got to find out FB's plans, get access to a bunch of market research and see what kind of hurdles they would face if they wanted to launch their own version of the same thing. Then by backing out at the 11th hour, they're able to undermine Libra's credibility before it gets started and make it look like a doomed project.
That's very "sort of", and very remote! I wouldn't trust my (the UK) Government as far as I could throw them!
Personally, I don’t trust any of these systems or organisations, neither tech, nor fintech, nor traditional banks. They’re all flawed for different reasons.
Technology is an attack surface the traditional banks don’t comprehend (from the horror stories I’ve heard from tech people who worked for them), and successful attacks on banking have rewards that tech… I don’t think fully appreciates.
True, but Tech also doesn't really appreciate banks. Banks make much of their money from transaction fees, from literally moving money from one point to another, to large IPO underwriting. Tech can certainly lower transaction fees, but a bank's transaction fees is more than just getting a job done, it's trusting that the job can get done. Banks are able to get away with large transaction fees because they have developed trust and credibility that many are willing to pay for. Tech simply sees this as an engineering challenge and ignores the non-tech legal and social guarantees that banks provide.
Literally the only wallet is a cold wallet. Cold hard cash.
What I have done is used it for my day-to-day shopping in Germany for just over a year, for holidays in Switzerland, Austria, Finland, and Spain, and also as a really good source of exchange rates when transferring money from my Pounds-only bank to my Euros-only bank.
In all occasions, it deducts from the correct balance without conversion.
Why would I need to use Libra or anything else, what does it provide me that normal money doesn't?
Why should a broken commercial currency with surveillance integration be used globally just because the US payment situation is broken?
Yes you can send money very quickly with SEPA, but that's not the settlement time. The money can still be reversed (although with more difficulty than credit card payments). With Bitcoin you also get a notification in seconds, but the payment becomes extremely more difficult to reverse in around 10 minutes.
So they're either equally fast or Bitcoin is faster.
From a banking perspective, the money is settled in 10 seconds, at least with TIPS (the ECB’s platform; the ACH clear it, but the end-user behavior is the same).
Reversal (known as a recall in the standards) requires consent of the beneficiary.
SCT Inst Scheme Rulebook § 4.3.2.3 [0].
Of course, if you are talking about fraud, yes: banks may answer positively to a recall, without contacting the beneficiary, when the beneficiary is a fraudster. Indeed, local laws often require that of banks, and therefore the standards define a dedicated protocol for that.
When you break the law, many legal protections no longer apply.
[0]: https://www.europeanpaymentscouncil.eu/sites/default/files/k...
And to clarify, it's not really "fraud", it's "claim by the originator that a fraud occurred". Which is a very different thing, and which matters immensely in practice.
In both of those cases, the beneficiary bank is not even required to send the funds back. It can require consent from the beneficiary (which is its client, after all) if it wants.
Yet in both cases, the beneficiary is not even meant to receive the funds.
Fraud works the same way: unless local law requires it, the beneficiary bank is not required to send the funds back, and can rely on beneficiary consent.
I suspect it won't be. Possibly could also catch on in developed countries, although places like Kenya and India already have home-grown non-bank phone-based payment systems. One market I can see would be remittances for international migrant workers - think the Indian workers in the UAE, or Filipinos (well, mostly Filipinas) across the Middle East.
All you need is somebody's phone number and the transfer is instant and with no taxes. You can also exchange currency at the interbank exchange rate during the week. And transferring that money to your local bank account is also free of taxes.
Not sure if Revolut will last, but I've been very happy with it.
https://www.itnews.com.au/news/aussie-banks-warn-customers-a...
In this story they refer to a “spike” in queries to the database. What actually happened is that someone tried querying every mobile phone number in Australia.
In Europe I can authorize a seller to directly take money from my account, if it's money for someone I trust (family, close friends) I can give them my prepaid credit card number and charge it with just the amount they need
Do you really think that Libra would make this simpler?
That’s an oxymoron in general, but also specifically, did you just say Facebook is trustworthy? O_o
Low quality comment, I know, I just couldn’t resist.
As someone who runs a business that has (small) offices both in EU and North America, let me share a quick overview of the current state of things.
When you want to transfer a non-trivial amount of money between 2 countries, you have likely received it in the originating country's currency and are planning to spend it in the destination currency. Now because you don't want to pay ~3% currency exchange fees to your bank, the only reasonable way to do this is to get an account with a business forex broker, that will offer you a rate in the ballpark of 0.5% off the spot price. You will have to do the KYC/AML [0], but the complexity of the whole transfer is basically this:
1. Do a domestic wire to your broker's office in the originating economic zone.
2. Wait for them to call you and confirm the exchange rate.
3. Receive a domestic wire from the broker's office in the destination economic zone.
You often need to show the invoices/contracts showing the origin of the funds and the purpose of the transfer, but if you are running a legitimate business that pays taxes, you will need those for accounting reasons anyway.
Now the 0.5% fee charged by the forex trader (that is bound to a bunch of rules and regulations making it harder for it to run away with your funds) is not worth putting your trust into a fully automated distributed ledger, where a lost password or a hacked computer could permanently eat away your money without any legal recourse.
So the only potential audience of a new international coin would be people actively trying to evade KYC/AML and that's exactly why the governments will do their best to prevent it from getting adoption (which is very easy since you can outright ban the fiat endpoints in your jurisdiction).
On the other end, there's a bunch of people who have never written a response to an AML inquiry and have hardly done any business outside of their own state, that are hoping to get rich quick by grabbing a stake at something they haven't fully researched and later reselling it at a profit to someone who will actually need it. I wouldn't see any reason for it to be successful long-term, sorry.
I transfer money to Africa on a regular basis, and I don’t have these same issues other than the difference between published exchange rate and realized, which is about 1-1.5%. Transfer fees are minimal.
I transfer about $3,000 per month, but no I could go up to at least $10K without issue. Occasionally it can have a bit of a delay, but normally it closes in less than a minute, and I get email and text updates on the status, no calls needed.
i wonder how much money is actually left after the whole transaction
I then just advised to use their local bank's wire transfer, which they had to visit in person at the local branch, as they had originally intended.
Nowhere in my Google searches and Transferwise articles did I see any limitations upfront. Nor did I figure out how to raise these limits after searching post-filling-out-everything.
Very disappointed to say the least. But if anyone knows if I can raise the limit, would be happy to try this again.
In summary I agree, it is not hard in NA or EMEA to send intentional funds
>2. Wait for them to call you and confirm the exchange rate.
> 3. Receive a domestic wire from the broker's office in the destination economic zone.
> You often need to show the invoices/contracts showing the origin of the funds and the purpose of the transfer, but if you are running a legitimate business that pays taxes, you will need those for accounting reasons anyway
When my father used to do research in the 60/70s the way they got a paper was to write a (paper) letter to an author asking him for a copy, put it in the mail, wait for a couple of weeks, and then get an answer from the author with the paper. It was simple, easy and straightforward.
Fast forward 50 years, we have access to millions of articles at our fingertips in a second with the likes of scholar.google.com.
Here, I can do it too: 50 years ago, I'd make fresh-squeezed juice by hand over the course of about 2 hours. Fast forward to a couple years ago, and juicero let me create fresh juice in under 5 minutes with no effort. Yet, somehow, juicero no longer exists and had very few users.
Or again, 50 years ago I'd wire money to people via a bank transfer which would take multiple days, and back in 2012 I could use liberty reserve to do the same thing instantly. And yet, somehow, liberty reserve no longer exists and had almost no users.
Comparisons that are as glancingly related as "more convenient" or "are new technology" are absolutely worthless.
Juicero no longer exists because people realized they didn’t need the insanely expensive subscription juicer machine and could squeeze the juice bags with their hands to obtain the juice. Hilarity ensued. Further details are available on their Wikipedia article, too.
I’d caution you not to read into these two data points.
And if I never needed to have a bank account before, just being able to open it while paying for my food won't suddenly create the need for it.
Grocery store handle a surprisingly large amount of money transfers and act as pseudo-banks to many of the unbanked. Some of them have their own banks on top and others have bank branches in them. Lots of people use these services.
Wal-marts cash checks, do money transfers, and provide debit cards which act as a pseudo-bank account since they can be used with direct deposit etc.
A blockchain is also a digital signature, a verifiable programmable general purpose ledger for smart contracts. Just giving each FB user a wallet id, even without money, has a lot of potential.
I put on virtual pyrotechnics shows in various grids and and get paid or tipped in either the grid's own digital currency or in Gloebits. Gloebits are better since they can be spent on various different grids and by all my accounts. I also take paypal.
Paying for 'bits' of content is already a thing, you can buy single article access on many of the newspaper websites today.
AML/KYC requirements took a scan of my passport, and two days to get verified. At which point, I was good to go.
If it happens less than 0.5% of the time, then you are losing more money in fees with your forex broker.
Also don't forget the massive cashflow advantage of dealing in crypto only. Minutes to send crypto vs 24-48h + weekends/holiday delays incurred by your broker wires. That's especially true of businesses who transact with their partners/suppliers/contractors in crypto so they even avoid the fiat<>crypto conversion step.
«any legal recourse»
There is always legal recourse. Plenty of crypto thieves have been, are being, and will be prosecuted.
Transfers could (and often are) instant without cryptocurrencies too. Inside Europe most transfers clear within minutes.
The main reason why some transfers are slow is due to KYC rules which cryptos do not implement. With the same procedures in place, they'd be just as slow.
"You might want to ask yourself why the pressure has been so intense. And read some history that Bitcoin pioneers were aware of, for example the failure of e-gold. Your failure to learn from history has caused you to at great cost recapitulate the failures of the past.":
https://twitter.com/NickSzabo4/status/1182776582932332544?s=...
Good or Bad, its hard to tell for the project but at least you are left with the feeling that Libra team is formidable and preparing to weather the storm.
If I have to guess, something is going to come out it from this project, either a policy clarity from governments or while tinkering Libra team may pivot into some useful use case etc.
In much the same way that your keys are always in the last place you look, the last thing people say before "I give up" is often "I'm going to keep going." I expect Libra to be officially dead by the end of the year, although Facebook might slap the name onto some unrelated project in an attempt to save face.
Special thanks to @Visa and @Mastercard for sticking it out until the 11th hour. The pressure has been intense (understatement), and I respect their decision to wait until there’s regulatory clarity for @Libra_ to proceed, vs. the invoked threats (by many) on their biz.
I would caution against reading the fate of Libra into this update. Of course, it’s not great news in the short term, but in a way it’s liberating. Stay tuned for more very soon. Change of this magnitude is hard. You know you’re on to something when so much pressure builds up.
[1]https://twitter.com/davidmarcus/status/1182775728431087623