Opinion: “Libra” or the power of money

Cryptocurrencies have been around for a while, but it’s Facebook’s Libra coin that has marginalized some Western governments. Henrik Böhme said they were right to be concerned.

Taxi drivers around the world are rebelling against Uber’s competition. Courts have so far ruled in favor of traditional business models, but how long will this last? Hotel bookings are dwindling as people prefer to stay overnight on AirBnB.

Also in this case, the judges are positioning themselves as new homegrown internet competitors because their business principles imply a degeneration of already scarce habitable space. Phone companies lost sales because calls between continents were free via WhatsApp. Cable providers are facing tough times as more and more people, especially the youngest, access everything they want via streaming services like Netflix or DAZN. Retailers are also affected, as it’s ultimately faster to order things from Klick, Amazon and the company.

It has long been evident that digitization is changing every aspect of our daily lives and economic activity, whether in industry or services. It seems that this process cannot be stopped, nor can it be reversed. It will be everywhere, including finance.

So-called cryptocurrencies have been in the headlines for a while now, often with negative connotations. Of these digital payment methods, the most famous Bitcoin is known for its stock market gimmicks or for cybercriminals who simply accept this cryptocurrency as a ransom. And for organized crime or drug mafia, these cryptocurrencies are a godsend: it’s easy to obscure their digital trail in the depths of the internet.

Good Mr. Zuckerberg

But money and friendship don’t get along. Therefore, those from the analog world are skeptical of the digital currency world. That’s why, so far, these steps are few or non-existent. However, this is starting to change. Recently, internet giant Facebook revealed its plans to launch its own cryptocurrency under the name Libra.

Every time Mark Zuckerberg has these thoughts, he’s trying to convince people that everything is in good faith. Global Internet Supply Network to the Last Corner of the Earth: A Natural, Purely Human Story. Now a digital currency, sending money is as fast, safe, easy and cheap as sending a WhatsApp message (owned by Facebook!). In their view, the goal of the Libra consortium is, of course, not to make money, but to provide financial services to the 1.7 billion people without financial services. A fully human story, again.

Few believe that Zuckerberg and his staff have only good intentions. Why did Ebay, Paypal, Mastercard and Visa turn their backs on them? Why are regulators and the Ministry of Finance nervous? Why did Zuckerberg spend six hours this week answering questions from a US congressional committee?

The end of the dollar?

The worry is that a financially powerful company like Facebook, with 2.4 billion users, enters financial markets and jeopardizes their stability. Furthermore, it jeopardizes the dollar’s role as a global currency. This will have major implications for U.S. foreign policy. Many sanctions against countries and leaders are carried out through this currency. This will no longer make sense. Or, for example, in relation to money laundering or terrorist financing: when the flow of funds is lost, which is already happening today, things can get out of hand.

Cryptocurrencies have been around for a while, but it’s Facebook’s Libra coin that has marginalized some Western governments. Henrik Böhme said they were right to be concerned. Taxi drivers around the world are rebelling against Uber’s competition. Courts have so far ruled in favor of traditional business models, but how long will this last? Hotel…