Global regulators should halt Facebook’s development of Libra, its new digital currency, according to The Logic’s subscribers.
Thirty-one per cent of subscribers said they strongly agreed with the statement, and 25 per cent said they somewhat agreed.
The results are from The Logic’s July 2019 subscriber survey. A private link was sent to subscribers by email and the survey was conducted online. All respondents were kept anonymous and duplicates were removed as needed. Subscribers were asked to provide responses to a series of questions. For this question, subscribers were asked, “Do you agree or disagree with the following statement? ‘Global regulators should halt Facebook’s development of its Libra digital currency.’” Their choices were: strongly disagree, somewhat disagree, neither disagree nor agree, somewhat agree, strongly agree.
“I am not [against] technological innovation,” wrote one subscriber, “but I am deeply concerned about Facebook’s motivations.”
Facebook announced the digital coin in June. It’s scheduled to launch in the first half of 2020. The company intends for the coin to be used to pay for services on Facebook and its subsidiaries, Instagram and WhatsApp, and to transfer funds more affordably than traditional banking. The coin will be governed by the Libra Association, a Geneva-based non-profit that includes firms like Uber, PayPal and Toronto-based Creative Destruction Lab.
Since its launch, regulators around the world have raised concerns about the coin’s development. That includes Mark Carney, Bank of England governor; Randal Quarles, chair of the Financial Stability Board, an international organization of policymakers from large economies; and U.S. President Donald Trump, who called on Facebook to register as a bank and said unregulated crypto assets can “facilitate unlawful behaviour.”
In Canada, the department of finance told The Logic in July that it did not yet know whether it would add new regulations or policies on the coin, as it wanted more information.
Many subscribers echoed the regulators’ calls, saying they lacked trust in Facebook based on how it’s handled its namesake social media platform. “Facebook has shown a willingness to allow harm,” wrote one respondent. “It has to be overseen.”
The firm should “[account] for its [current] transgressions before moving into an area that can have even more dire unintended consequences,” wrote another respondent.
In July, David Marcus, head of Facebook’s financial services subsidiary Calibra, told the U.S. Senate banking committee Libra would not launch until the company had “fully addressed regulatory concerns.”
In March 2018, The Observer and The New York Times reported that Cambridge Analytica, a data-mining firm, had allegedly harvested the information of 50 million Facebook users without authorization in 2014, using the data to influence the U.S. presidential election two years later. The report alleged that Facebook found out about the move in late 2015, but did not alert users at the time, and took limited steps to secure their personal information. CEO Mark Zuckerberg issued an apology regarding the incident one week after the reports were published.
Facebook has scored consistently low on The Logic’s monthly survey measuring subscribers’ outlook on companies’ long-term prospects, receiving an average score of -16.2 points. It currently has the lowest average of all 11 publicly traded technology companies surveyed, which includes Amazon, Google and Microsoft, as well as Canada’s BlackBerry and OpenText.
In the year and a half since the Cambridge Analytica scandal broke, Facebook has fielded a number of other high-profile privacy-related issues. That includes a hack of about 50 million users accounts; a report stating it gave companies like Apple, Microsoft and RBC access to more sensitive data than users had agreed to share; and that it had exposed over six million users’ photos to third-party developers, whether or not the users had agreed to share them publicly.
Several subscribers took issue with Facebook’s data-handling policies. “The company has failed customers in terms of privacy data collecting,” one wrote.
“Once [Facebook is] able to track your monetary transactions, it’s easier for them to sell complete personal profiles to data brokers,” said another.
“Facebook’s monopoly on Internet communications gives it too much of a distorted advantage to also become a payments processor,” wrote a respondent.
Other subscribers, however, expressed interest in Facebook developing its own digital currency.
“Halting would be futile resistance and unhelpful to governments preparing, adapting and leveraging the inevitability of digital currencies,” wrote one subscriber.
On Saturday, China’s central bank—which has been critical of Libra—said it was almost ready to launch its own digital currency. Though it’s been in the works since 2014, the coin’s development was accelerated due to recent “external factors,” according to Mu Changchun, deputy director at the Payment and Settlement Department of the People’s Bank of China.
“Government should not predetermine private business initiatives,” responded another subscriber.
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Some subscribers brought up digital currencies’ appeal as an alternative to government-backed money.
“While this like all financial innovations will end in a crash, the issuance of money is not inherently better in government hands,” wrote a subscriber.
Though the majority of subscribers had reservations about the idea, some who said they wanted Libra halted said they weren’t calling for it to be stopped permanently, just long enough for regulators to rein it in.
“I understand government hesitancy, though I think I’d rather see regulation over pure shut down,” a subscriber said.