While the announcement about Facebook deciding to release Libra coin through their platform has been recent, it has already been seen as quite a controversial one. While many within the blockchain and cryptocurrency communities have been seeing the Facebook decision as a positive one, at least in terms of promoting the concept to the world.
But, as the world has caught the gist of the decision, something quite interesting has happened. There have been a large number of negative reactions from all layers of society. Specifically, financial institutions, politicians, and seemingly everyday Facebook users are seeing Libra as threatening the peaceful continuation of their daily lives.
Although each part of society seemingly has a different reason to dislike the concept of Libra, the infamy that the coin is getting might cause it to have issues being used successfully in the markets. Let’s take a look at why some are looking unfavorably onto the development and how they might be right to do so, and what Facebook could do to disperse these doubts about the tech.
The competition feared by banks
Some of the biggest decriers of technology have quickly become the big, international banks around the world. This was to be expected. The introduction of cryptocurrencies through such a widely used platform as Facebook could be incredibly damaging to banks.
Currently, banks are the only institutions that have a monopoly on the business of international transfers. With the introduction of Libra, facebook would be able to get into the business and start competing with the banks, taking away their clientele with potentially superior service. After all, being a cryptocurrency, Libra would be able to transfer funds for cheaper and much faster than the traditional, intermediary bank method. But, this was the point of cryptocurrencies all along.
One of the most popular Australian gambling software providers sees this as an opportunity for the industry to move away from the employment of traditional banks. It has long been a problem for online casinos within Australia and around the world, that many banks decide to forbid certain transactions, limit the size of transactions or otherwise interfere with transactions that are made to and from casinos. With the introduction with a widely used cryptocurrency, casinos would be able to move away from using banks.
And the same goes for all other service providers and retailers, all of which have to pay fees for transactions made through banks. Seeing this, the banks would start panning. Offering the same service as them, but faster and cheaper is something they don’t want anyone doing unless they start doing it themselves. Thus the criticism.
The Facebook monopoly feared by politicians
This concern is a little more valid than the one expressed by the large banks. Facebook is an incredibly rich and large company, which covers multiple technological fronts and offers many high tech solutions to its users.
Many politicians have already expressed their concern that Facebook is quickly becoming a monopoly with too much power in the industry. These politicians are thinking of invoking some antitrust laws against the company, in order to bring it down to size and allow the industries within the country to continue functioning without Facebook, and other companies like it, drowning them out of the business.
With the decision to introduce a financial product, many politicians are seeing the company quickly become more and more ubiquitous throughout many industries within the country. The bigger the company is, the more control it exerts over the smaller ones in the industry. Which is why so many politicians are fearing that the introduction of Libra could turn out to be quite dangerous to the continued development of the local economy and the technological and cryptocurrency industries.
In this case, there is more reason to believe that the politicians might just be right. Facebook is quite a large company, and giving it the right to control Libra, a financial product that could be used by millions of people around the world, might be dangerous. There is no specific knowledge of how the company would be able to leverage this and what kind of effect it would have on the global communities and on the cryptocurrency industry itself.
Questions of security, asked by users
Possibly the least discussed concern of the entire announcement has been the question of security. While it is often mentioned as part of the argument against a Facebook monopoly, many people have failed to mention the kind of danger that the lack of security for financial information and transactions can present.
In this case, we are not saying the Facebook will be vulnerable to hacking (even though it has been known to be quite vulnerable), but rather the fact that Facebook will keep gathering information about user transactions over the years, creating profiles for what users consume, and other private information.
Facebook is already known for gathering the personal information of all users. By gathering transaction history information, Facebook would be able to craft a much more complete history and profile of the user, which might be used for marketing purposes that the user themselves might not have known they were agreeing to. There are other implications that might need consideration, but this one is here to lead the discussion and start somewhere.
The issue has been becoming subject of discussion among certain users and is one that needs to garner more attention from the general public. It is closely related to monopoly concerns, but it needs to be addressed individually in order to find what other caveats this kind of information in the hands of Facebook might have.