The internet giant is again setting out to better the world – this time with a global cryptocurrency. One can only hope that regulators bury the project, says finews.com editor Peter Hody.
Facebook is absolutely the wrong institution to issue and control a global currency. Do financial regulators need a reason to reject the social network's plan for Libra, a Facebook coin?
Here are a few: Facebook is a conglomerate whose «raison d'être» is to exploit personal data of billions of users for profit maximization. It is controlled and operated by one person whose shortcomings as a business and tech leader are exposed time and again.
Attempts at Arm's Length
Mark Zuckerberg as the operator of a global currency system, its users, money flows, liquidity, and data transparency – are you kidding me? To be sure, the social media network has attempted to build a corporate governance structure to pre-empt such criticism.
The move is meant to create the impression of distance to Facebook, and thus to Zuckerberg: Calibra is a subsidiary, and together with other U.S. companies a founding member of the Libra Association (the same Swiss entity used by global soccer body FIFA).
Improving the World
The project's headquarters in neutral Switzerland – where tech firms appreciate rule of law and strict data protection rules – is savvy. Facebook is conveying the impression of an at-arm's-length relationship: the website libra.org contains no mention of the word «Facebook».
But Zuck's fingerprints are all over Libra: the project is selling itself as a fairy tale that the cryptocurrency will improve life for billions of people. «Making the world a better place» is tantamount to organized religion in Silicon Valley, and found is nearly every tech firm's mission statement.
Anywhere, Anytime, Anyplace...
The public is led to believe that tech wants to smash antiquated economic structures, and shape profit-maximizing companies into more society-minded places. No doubt: the American «GAFA» tech titans – Google, Apple, Facebook, and Amazon – have radically reshaped our world.
Payments, money transfers, and other financial services are about to be rumbled by far simpler, tech-underpinned solutions. «User experience,» «customer journey,» «touch point,» «client engagement,» «disintermediation,» «ecosystem,» and «leaving out the middle man» are the tech-infused buzz words that executives in the «analogue» world have swiftly adopted as their own.
...Personal Data as a Deposit
Tech's promise is simpler and cheaper services for consumers, available at your fingertip. No consumer has anything against this ease of life – until the worrying concentration of economic power to a few decision-makers, effectively holding personal data as a deposit, becomes obvious.
Zuckerberg is the person driving this vision to the extreme: the American has advanced to one of the most powerful people in the world simply by controlling billions of sets of personal data. At just 35, he has already failed miserably in the face of this immense challenge.
Joking on Privacy
Facebook, the company, is entangled in countless scandals surrounding data privacy, influence in major elections and democratic process, intransparent rules – I could go on. Just last month, Zuckerberg used flowery language to promise users better data protection, and also to joke about Facebook's tarnished reputation.
The same Mark Zuckerbeg wants to use this platform in order to spread a cryptocurrency – the «Internet of money». Libra «would instantly become systemic and will have to be subject to the highest standards of regulation, Bank of England governor Mark Carney said.
Epitome of Incompatible
The highest standards of regulation and Facebook – the definition of incompatibility. This far, Zuckerberg has always knowingly pursued his business models where government supervision is weak to inexistent.
His concentration of power at Facebook, its laughable corporate governance structures, and his demonstrable and arrogant inability to adequately address the company's controversies thus far are reason enough for politicians in Europe and the U.S. to call for the social network to be broken up.
Zuckerberg couldn't have chosen a worse time to launch Libra. One can only hope regulators will be swift in disposing of it.
