What does it mean when Facebook says it wants its own currency? We explore the power, the potential and the pitfalls of Libra. How does Facebook plan to make money out of making money? Can anyone stop it? And does this represent a fundamental shift in the model of surveillance capitalism? Plus we consider some of the rivals it faces: Bitcoin, WeChat and the good old dollar. Finally, this week we pay tribute to our dear friend and regular Talking Politics contributor Aaron Rapport (1980-2019) with some memories of his many appearances on the podcast.
What is Libra?
- A digital currency that Facebook unveiled in a White Paper last month
- It aims to be a global currency that will bring the unbanked into banking and make certain transactions, such as remittances, easier.
- Libra itself would be managed by an association of members, including big finance companies, big tech companies, and NGOs. But Facebook would control Calibra, the wallet that would allow people to actually use the currency.
How is Libra different from Bitcoin and other cryptocurrencies?
- Unlike Bitcoin, Libra would be pegged to a basket of currencies. This would make it less volatile, but more centralized.
What would it mean if Facebook started issuing money?
- If Facebook were a state, it would have more subjects than any country on earth.
- Regulation remains a huge question.
- What will happen if Facebook has leverage over both social and economic capital?
If Libra isn’t stopped before it launches, it could quickly become indispensable.
- There are huge potential benefits, especially in terms of facilitating remittances and increasing the efficiency of payments.
- But there are also risks: this could allow Facebook to go even further in accumulating new kinds of data and monetizing human behaviour.
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And as ever, recommended reading curated by our friends at the LRB can be found here: lrb.co.uk/talking
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