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Home / Business / Facebook co-founder says Libra will strengthen companies and weaken developing countries

Facebook co-founder says Libra will strengthen companies and weaken developing countries



Photo: Chip Somodevilla (Getty)

Facebook co-founder Chris Hughes is sure to be an interesting person with whom to talk about Facebook can speak.

Hughes, who still sees his roommate Mark Zuckerberg as a friend, said Zuckerberg was too powerful and the company had to be dissolved. On Friday, Hughes warned that Facebook's new planned digital currency Libra would shift its monetary power to corporate giants.

"Acting quickly and breaking things – our mantra in the early days of Facebook – was a fitting slogan for a social college network," Hughes wrote in a post for the Financial Times. "It is not suitable for the global monetary system."

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The Swiss-based Libra Association, a group of Facebook and its global corporate affiliates with a starting fee of $ 10 million, will make all governance decisions related meet this new global currency. [19659004] Hughes, who left Facebook in 2007, tweeted on Friday that Libra was both "brilliant and frightening" because it shifted vital power into the hands of private companies. He wrote in the Financial Times:

Imagine Libra works as planned. Hundreds of millions of people around the world can easily send money across borders as they send a text message. The goals of the Libra Association explicitly state that skills promote "decentralized forms of governance". In other words, Libra will disrupt and weaken nation states by allowing people to move from volatile local currencies into a currency that is denominated in dollars and euros and managed by corporations.

Hughes is particularly worried about what a coin like Libra would mean For an emerging economy like Greece, "if enough people trade with their local currencies, they could endanger the ability of emerging market governments to put their money, the local means of exchange and, in some cases, their assertiveness to control capital controls.

He pointed to the economic turmoil in Greece and the government's lack of control over its own currency to cover the damage that the local economy can suffer in these cases.

This week reveals the Libra digital currency is expected to be introduced next year and controlled by a group of up to 100 major companies including Facebook, Visa and Uber. Although Facebook made a big announcement on Tuesday, there are still plenty of questions that need to be answered by both Facebook itself and the regulators already pushing the Silicon Valley giants for their plans.

Hughes cheers them.

"If global regulators do not act now, it could very soon be too late," Hughes said.

"We look forward to responding to lawmakers 'questions as this process progresses," a Facebook spokesperson said in response to a request for comment on Hughes' article.

Many regulators agree. Authorities in the United States and Europe have called for strict oversight, Rep. Maxine Waters called for a total [1945901041] moratorium and the US Senate Banking Committee will hold a hearing on the new digital currency in July.

"Facebook is already too big and too powerful and has used this power to exploit user data without protecting its privacy," Senator Sherrod Brown said in a statement on Tuesday when the Libra was publicly announced. "We can not allow Facebook to run a risky new cryptocurrency from a Swiss bank account without supervision. I urge our financial dogs to check this carefully to make sure that users are protected. "

Facebook is being investigated worldwide for privacy issues and expects US regulators to fine several billion dollars for data breaches.


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