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Economics

Palec dolů kryptoměně Facebooku

Jul 2, 2019 Joseph E. Stiglitz

NEW YORK – Facebook s některými svými firemními spojenci usoudili, že to hlavní, co svět potřebuje, je další kryptoměna a že pustit se do její realizace je nejlepší způsob jak využít rozsáhlé vlohy, jimiž disponují. Skutečnost, že Facebook uvažuje právě takto, prozrazuje mnohé o tom, co je na americkém kapitalismu jedenadvacátého století špatně.

V určitých ohledech je dnes na zavádění alternativní měny zvláštní doba. Hlavním důvodem nespokojenosti s tradičními měnami byla v minulosti jejich nestabilita, neboť vlivem rychlé a nejisté inflace byly špatným uchovatelem hodnoty. Dolar, euro, jen i jüan jsou však v poslední době pozoruhodně stabilní. Obavy dnes panují spíš z deflace než z inflace.

Svět také pokročil v oblasti finanční transparentnosti, takže je těžší bankovní soustavu zneužít k praní špinavých peněz a jiným nekalým činnostem. Technologie nám zase umožňují uskutečňovat transakce efektivně, peníze ze zákaznických účtů přesouvat na účty prodejců během nanosekund, s pozoruhodně dobrou ochranou proti podvodům. Poslední, co potřebujeme, je nový prostředek na podporu trestné činnosti a praní výnosů z ní, jakým se nová kryptoměna téměř jistě stane.

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Joseph E. Stiglitz

Writing for PS since 2001
331 Commentaries

Joseph E. Stiglitz, a Nobel laureate in economics and University Professor at Columbia University, is a former chief economist of the World Bank (1997-2000), chair of the US President’s Council of Economic Advisers, and co-chair of the High-Level Commission on Carbon Prices. He is Co-Chair of the Independent Commission for the Reform of International Corporate Taxation and was lead author of the 1995 IPCC Climate Assessment.

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0 Comments on this paragraph, 14 Comments on this article

Luis Arenzana Jul 19, 2019

This article is not very well researched. FB plans a full payment network and to this end is in discussions with Visa and MasterCard and First Data. FB will not launch a crypto currency but rather a stable coin backed by $1billiion in collateral. Payments in this Wallet woudl avoid credit card fees. Users may be rewarded (paid interest) for viewing ads and purchases with loyalty points.
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Alex Carranza Jul 13, 2019

Wrong idea No human being is born foolish. In a society as complex and as unequal as ours, it is our specialists and our governments who must protect the common citizen who is alien to a certain subject, from other abusers and criminals.
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Bartosz Solowiej Jul 9, 2019

There is another facet as yet untouched by analysts and economists: the role of decentralization and cryptocurrency as a hedge against national fiat in light of geopolitical instability. Venezuela, with its collapse and hyperinflation proved that anyone with the means could rely on the relatively less volatile equilibria within large cap alt-coin markets as a safe haven for soon to become worthless fiat. Prior to Libra, the central banks were dismissively considering the implications of cryptocurrencies in relation to fiat. Now, due to the distribution of total population potentially exposed to a universal through Facebook's user base, the standardization of international currency exchange as well as the invention of digital currency at the national level have come front and center again. Soon, we will see the first cashless systems introducing transparent ledgers in civilian banking systems. This comes after the national banks finish experimenting with international clearinghouse transactions over distributed ledger systems such as Project Ubin in Singapore and Project Jasper in the UK. Changes are certainly afoot. Financial antiquity is orbiting around a new center of mass materializing itself in the form of trustless cryptographic currency.
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New Cavendish Jul 7, 2019

The important thing to recognize is that Facebook's "currency" raises all the classic bank-regulatory questions, starting with the Bank Holding Company Act: a non-bank company would be prohibited from owning a bank for good, pro-market reasons recognized in 1956. It would not take much tweaking of the definition of "bank" (if any) to see that Facebook would be in violation of the BHCA. Beyond that, there are the classic bank-regulatory issues going back to 1933 (and bank currency-regulatory issues going back to the 1860's banking act): Facebook (or its vehicle) would be taking massive deposits from the public. How those deposits are managed would constitute a huge risk for individuals' finances and on the (global?) economy: classic bank regulations on capital and liquidity should apply; even if Facebook claims it will have 1:1 hard-currency backing, that needs to be supervised to be sure they really do that and, it seems, there would be exchange risk to be managed if it is backed by a multi-currency basket. Furthermore, there's operational risk to be considered, and it is hard to believe that would not be massive. Having the Fed examine it would not guarantee freedom from operational failure, but at least there would be someone looking over Zuckerberg's shoulder. And then there's anti-money laundering and sanctions oversight. Facebook should have to comply with at least the same requirements as banks, and perhaps more depending on the business model. And there's the competition issue. Banks are, appropriately, subject to stricter competition limits than other businesses; the same should apply to Facebook in its new payments role, which comes close to banking. And if it gets into lending (as some reports suggest), then the all of bank regulation follows, including fair lending and the rest. And then there's consumer privacy protection, where bank regulation is already ahead of the rest of the tech market (and should be tightened). There's nothing new under the sun and lots of existing laws and regulations should apply to Facebook's new venture. Prof. Stiglitz should collaborate with a banking law professor to develop a full picture.
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Douglas Leyendecker Jul 7, 2019

Finally, I can agree with Stiglitz...if only he'd lose his TDS... partly for his reasons but partly for another. The growth of any non sovereign currency is a threat to the fiat currency system, which is a threat to today's organization of sovereignty. We may not be happy with the way our countries are being managed, but they are the vehicles that create and protect order. Destroy them and we'll destroy order. Any non sovereign currency threatens sovereignty as we know it today. The "country" of Facebook would enjoy it's "existence" on the backs of sovereign tax payers. Taxpayers pay for system and order to be maintained while Facebook gets more profits and more control over minds and behavior.
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Naomi Chakwin Jul 7, 2019

The headline says it all. Do you trust Facebook with you money? If the answer is anything but NO! you haven’t been following the news on Facebook. WCGW? I’m tempted to let them try and fail miserably but I know most of the fallout will be people who can ill afford to lose money. I am also not reassured that the US Congress has the capacity to even understand the Facebook biz model let alone provide guidance on how and what to regulate. Coming to terms with our technological growth from adolescence to adulthood is something we are institutionally unprepared for.
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Paul Daley Jul 3, 2019

I couldn't disagree more. Facebook's proposed currency is a step away from fractional reserve banking systems that require backing by the full faith and credit of national governments just to maintain the payment system. Facebook, in contrast, is offering to draw on its capacity to harvest information in order to maintain the payment system at little or no public cost. There certainly will be regulatory issues but it's hard to see how a system maintained through multiple open ledgers would be more difficult to regulate than the current hodge podge of multiple national systems. And finally mixing money with data could help establish fiduciary standards for data management comparable to those we now have for money.

In short, Stiglitz and others should take a close look at the public costs and risks that are embedded in the current payment system before they condemn a new system that could be cheaper, safer and far easier to regulate.
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Michael Public Jul 3, 2019

Why do you compare the distrust levels of Facebook to those of banks? Whatever you may think of the Cambridge Analytica and similar fiascos they pale in comparison to the evils that culminated in 2008, to say nothing of bankings structural support of rising inequality.
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Henry Rech Jul 3, 2019

Welcome to the brave new world of a "globally digitally native currency".

Specifically, welcome to:

- the Libra ecosystem
- the Libra Blockchain
- the Libra Association
- the Libra Association Council
- the Libra Reserve
- the Libra Testnet
- Calibra
- the world of distributed governance
- validator nodes
- Byzantine Fault Tolerant (BFT) consensus
- Merkle trees
- pseudonymous addresses
- Move
- geographically distributed network of custodians
- the Reserve Management Policy
- permissioned blockchain
- permissionless governance
- permissionless ecosystem
- open identity standard
- portable digital identity
- social impact grants.

Just a few of the elements of the Libra ecosystem that will require a new familiarity. We have until the first half of 2020 to be fully au fait with these notions and terms.

This digital ecosystem will be overseen by the not-for-profit and independent Libra Association Council headquartered in Geneva Switzerland. The reason given is that Geneva has a unique cachet - it has a history of global neutrality. It is also not necessary to remind that Switzerland is the home of the anonymous bank account and (alpine sized) mountains of clandestine money. Of course, that other organization overseeing the world's existing monetary system, the Bank of International Settlements, is also headquartered in nearby Basle. Perhaps some respectability will drift along and over the intervening valleys and peaks of the Alps.

Initially, Libra will be backed by a reserve of sound international currencies. However, just as the gold standard was a stepping stone towards a fiat currency system, the reserve backing of the Libra is intended to eventually become redundant - somehow - anticipated morphogenesis into a decentralized, reserveless and permissionless currency is expected after a five year development phase. An ambition engendered by the exemplar of the fastly risen Facebook.

It has to be said that any man in the street using the existing national fiat currency systems, requires no deep knowledge of the institutions and rules that govern the system. All that is required is trust. No doubt the Libra ecosystem will also function without the need of a deep familiarity with its elements - and trust will be at a premium.

Joe Stiglitz makes mention of the Facebook's intimate knowledge of the birthrate of suckers. (The existing system probably is no different - are we not duped into believing that a piece of pretty paper or a number in a ledger has value.)

The word "berg" is said to having the meaning of "a mountain". Perhaps mountains of the requisite suckers could be loosely translated as "suckerbergs".
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David Donald Jul 3, 2019

As with FinTech generally, the launch of a cryptocurrency creates a powerful distraction from our primary criticism of Facebook. When the financial industry started talking about "FinTech" in 2015, the press stopped talking about how to ensure the banks don't misbehave dangerously again and focused full attention of the new topic. The same thing is happening with Facebook.
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