Facebook Currency

The Facebook elephant enters the coin store...

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Mark Zuckerberg, the founder and boss of Facebook is a man in a hurry. Today he is presenting "Libra", which he wants to put into circulation as early as 2020. Sa change. In so doing, he confers on his group a power hitherto reserved for States. With more than two billion users, Facebook is entering the mysterious world of money, even if it means shaking up the central banks, habits and economy of the world.
 
Ae New York Times had already spilled the beans several weeks ago, explaining that the Californian giant was seriously working on the creation of a Facebook currency. Mark Zuckerberg had been thinking about it for a long time and had built the architecture of his group as if he had only this idea in mind. Indeed, with 2.3 billion user-citizens, Facebook has a unique potential in the world to create a currency and develop virtual payments through its messaging systems WahtsApp and Messenger. In Zuck's mind, it's not about creating yet another cryptomony or adding one more bitcoin to an already long list. Zuckerberg is not a follower but a creator. According to an expert interviewed by the site Scholar.comWhat he wants is to beat the money and make some. "the most stable and least speculative benchmark in the world... ".
 

Facebook invents "stablecoin"

Indeed, we tend to associate the future Facebook currency with Bitcoin, the sulphurous smelling cryptodevise, which has got us used to its tobogganing acrobatics. In reality, Facebook's Libra is something else. Certainly, like Bitcoin, the first and main decentralized virtual currency, Facebook's currency should use the "blockchain", this decentralized, public and unforgeable register, which guarantees the reliability of exchanges without the need for a trusted third party.
On the other hand, Facebook's cryptomoney should not fluctuate freely according to supply and demand, as is the case with Bitcoin. Bitcoin, which was worthless when it was created and exceeded $19,500 in December 2017, has often been criticized for its high volatility, which is seen as a brake on its adoption by the general public. Indeed, according to several studies, bitcoin is more often kept for speculative purposes than used as a medium of exchange. Facebook, on the other hand, is moving towards the creation of a "stablecoin", a cryptocurrency backed by a basket of real currencies - dollar, euro, yen, etc. - which is supposed to guarantee its price.
 

A revolutionary idea that will shake up the banks...

Zuckerberg's idea sounds revolutionary. To pay for a product or a service, to make a transfer to his family, no more need for cash, bank cards; no more need for exchange transactions and complex banking manipulations. All you have to do is transfer the money using a smartphone. as easily and instantly as when you send a message. "says a statement from the social network.
 
The Calibra application created by Facebook for its virtual currency
 
Purely virtual money, without intermediaries, which should make traditional banks sweat, whose economic model based on a plethora of commissions of all kinds is in danger of being seriously abused. To drive home the point, Facebook specifies that the Libras may even be accessible to people without a bank account; an audience that represents "... the people who are the most vulnerable to the risks of fraud and corruption. half the adults in the world "Facebook insists, adding that the proportion is even higher in developing countries.
 
Zuck's idea became a reality only a few months ago, with the setting up of a team dedicated to the project at Memlo Park, the Californian headquarters of the social network, with around fifty people working in the greatest discretion, in almost complete isolation. A fighting staff, led by the best that can be done: David Marcus, the former boss of Paypal. Their work has been fruitful and efficient, since the launch of this currency would take place as early as mid-2020. What appears remarkable in this story is that Facebook has managed not to go alone in this adventure; it takes with it some twenty giants of commerce and payments: Visa, Mastercard, Paypal, Uber, Spotify, eBay, Booking and even Free, the company of Frenchman Xavier Niel.
 
 

Sovereignty and legitimacy

Beat it. This is the regalian privilege of the states. The strong symbol of sovereignty. It is often said that with its billions of users, Facebook is the number one country in the world. Is it nevertheless, in terms of legitimacy, a state? Certainly not, so far. Facebook reigns over a market, a gigantic one, but only a market. A state is based on the principle of political legitimacy born of elections. A legitimacy that allows the state to legislate, to use legitimate violence, to regulate society and the lives of its citizens; to exercise power.
 
Is political and democratic legitimacy being challenged by a new form of legitimacy, that of the market? Facebook certainly has immense power: that of capturing a market and applying its law to it. Does this mean that it is legitimate? Some might be tempted to answer in the affirmative. Indeed, in a political democracy, we vote a few times; in a market, we vote on every purchase, every use of a service. Does market power confer any legitimacy? Mark Zuckerberg seems to think so. Therefore, when he forms the project to mint money, he attributes to himself an essential sign of the State: "... the power of the State is a sign of the State. A currency is the symbol that reinforces belonging to a community, it is a vehicle for social ties. " described the economist Philippe Herlin. All these dimensions are the very nature of Mark Zuckerberg's social network.
 

Confidence

Zuck's desire to make money changes the register, and in so doing he marks the pinnacle of political legitimacy, which is based on trust, an essential element that is sorely lacking in many states. Zuckerberg knows that he can create a currency, because today's world offers him that opportunity. He has the legitimacy to do so, which is no longer conferred by politics or democracy but by the market.
On the other hand, the element of trust is too damaged by Facebook's multiple security holes and operational drifts to do its job properly.
 
With a view to creating a currency, the diverse and varied peoples who make up the huge cohort of Facebook users must be reassured that they will have to give up trust in the network, especially since it will affect their wallets. This explains why Zuckerberg has chosen a governance model for its currency that is very much in the banking tradition: a Foundation established in Switzerland, in Geneva. This private foundation, the Libra AssociationThe European Central Bank (ECB), an alliance of some 20 founding members at the beginning, will act as a transnational central bank. It will perform both financial and commercial functions; as such, the members of the alliance will be able to offer new services and payment solutions based on Libras.
 
Such a governance model is not the best sign of transparency, but the symbol of the Swiss safe is there to reassure.
Especially since Zuckerberg's project does not consist in creating just any currency, but a reference currency. A currency that is insensitive to market shocks and monetary hazards, a safe and strong currency. The Facebook boss dreams of a non-speculative currency, which would fulfil a social utility.
 

Zuck, saviour of the world

On this last point, he is playing on velvet, as financial institutions, whether public or private, such as banks, are no longer recognised by the people, because they no longer operate in and for the economy, but rather against it. The yellow jackets have broken banks, Wall Street and the City are clacking because people have understood that the driving force behind these institutions is speculation and index management. Financial institutions no longer play the economy's game in the eyes of the public, quite the opposite. And their little game leads to crises.
 
By promising a stable currency, Zuckerberg, who suffers no inferiority complex, intends to throw a lifeline to the world whose horizon is limited to the anguished expectation of another crash. « The libra's mission is to enable the development of a simple global currency and financial infrastructure that empowers billions of people. "said Dante Disparte, head of policy and communication at the Libra Association, in an interview.
There is no doubt that Facebook's currency could become an alternative private currency to that of states with volatile currencies such as Venezuela, Argentina, many African countries or India.
Zuckerberg, savior of the world: what better way to sharpen your ego?
 
 
With AFP
 

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