Unsurprisingly, mainstream media went Facebook-crypto-crazy this week as they all covered the launch of Libra, Facebook’s cryptocurrency. The resulting coverage was pretty damning and pointed in only one direction. We’ll let you have a read and form your own conclusions as to what they made of it all…
Guardian – “Libra Doesn’t Sound Like Freedom”
Former Guardian columnist Charles Arthur rang the alarm bells in a return to the paper for a Libra-special, and he was immediately critical of Facebook’s aims:
You probably thought that we already had a global currency and financial infrastructure, and you’d be right: a loose alliance of banks and central banks around the world keeps the lights on and the bills paid. So why does Facebook want to tear it all down?
Going by previous Tweets on the subject, Arthur is clearly a crypto skeptic (unless he has been told to be by the Guardian, which would fit with their ethos), so it’s hardly a surprise that he is in favor of maintaining the status quo. However, Arthur’s issues are more with Facebook’s track record as a company than the crypto element – he raises valid concerns about their handling of data, its consistency of applying its own rules, and its seeming desire to act as a government rather than a company, stating, “I’m worried that the future involves being forced to use Facebook in order to make everyday transactions, and that the privacy promises will evaporate.”
Wall Street Journal – “Unproven Concept”
The Wall Street Journal were circumspect in their analysis of Libra, wondering whether anybody would trust Facebook with something so important as their spending habits given its “tarnished brand name.” They question how the enterprise will make money (billions of dollars suddenly stuck in a bank gets you a nice amount of monthly interest), how the token will fare against the inevitable regulation, and how Facebook will cope with the negative connotations of cryptocurrency. They summarize by saying that “Facebook may have more to lose than gain from Libra”, which is an interesting take on the project.
Financial Times – “Libra Will Not Solve the Problem of the Unbanked”
The fervently anti-crypto Financial Times released a number of responses to the launch of Libra, each of them negative either wholly or on balance. The most critical was a piece from U.S. editor Brendan Greeley, who ripped apart Facebook’s altruistic-sounding aims of banking the unbanked. Such gems include “…Facebook isn’t actually worried enough about the problem of the unbanked to do its own research and describe the problem with any discipline”, “Facebook seems to think that the unbanked face a systems challenge, to be fixed with private investment and remote engineers”, and “…if you really want to help people, a brand-new currency seems like an awkward and convoluted way to do it.” Ouch! They didn’t even have enough bile left to bash Bitcoin, which is a first.
The New York Times – “Systemic Risk”
More evidence of the mainstream media’s feelings towards Libra came courtesy of the New York Times, which systematically pulled apart Facebook’s plans both on an ideological and practical level, doubting whether the American public would ever accept such a close relationship between their money and a single corporation. Some choice concerns include the risk of Facebook “failing to recreate such safeguards could facilitate money-laundering, terrorist financing, tax avoidance and counterfeiting”, that “insiders belonging to the Libra cartel could exploit their access to information, business relationships or technology to give themselves advantages”, and finally that Libra brings a “systemic risk into our economy.” So that’s a no then.
Time Will Tell
This strength of opinion is to be expected given that many sections of the mainstream media are either owned or have strong connections to figures and companies within the traditional banking sector. Some of the points they raise are the same they have been using to object to Bitcoin for ten years now, but some are valid and will need addressing by Facebook. Nevertheless, it will be interesting to see where we are in ten years and whether the same outlets (if they still exist) are using the same arguments to bash the token their subscribers are paying with .