Though seductive as pure financial innovation, Facebook's crypto currency project risks a concentration of power that must be stopped at all costs.
PARIS — While top Democratic presidential candidate Elizabeth Warren is calling for the break-up of Facebook and other would-be American tech monopolies, Facebook founder Mark Zuckerberg has announced the creation of a new currency.
This is no PR gimmick. Facebook's team has been secretly working on the project for a year. A subsidiary, "libra," has been established in Switzerland to develop the blockchain technology needed to create the cryptocurrency. Exchanges have already taken place with the governor of the Bank of England as well as with other crypto-markets such as Gemini that was ironically founded by the old nemeses of Zuckerberg: the Winklevoss Brothers, from their days at Harvard.
"Sending money to someone should be as easy as sending a photo," Zuckerberg declared. The details are vague still, but Zuckerberg's message (and ambition) is clear.
Facebook is poised to take us into a cashless society.
It's important to try and measure the impact the libra currency could have. With 2.4 billion users around the world, Facebook would be able to develop a financial tool of formidable efficiency. No need to type the number on your credit card and date of expiration. No need to remember complicated passwords to pay your plumber. No need to pay bank fees!
Like in China with Alipay or WeChat pay, Facebook is poised to take us into a cashless society, where all purchases can be made on demand through a smartphone-generated QR code. In addition to being its own currency, independent of exchange rates and cost-effective transactions, Facebook's currency would quickly aggregate all services, including e-commerce and the old-fashioned banking industry. No doubt this fluidity would quickly win over the skeptics.
Facebook's plans could also risk an end of the nation-state, an already faltering institution. In his Six Books of the Republic, French political theorist Jean Bodin (1530–1596) associated sovereignty with the monopoly of money. Only those with the power to make the law, he explained, have the power to control money. And in every well-ordered Republic, only the sovereign prince has this power.
It is not for nothing that counterfeiting was long considered a crime of lèse-majesté . But today, who is it that establishes laws, or norms, in regards to freedom of expression? Facebook. It seems only logical, then, that it would next mint money in the place of governments, which will collapse on their own accord with the mountain of debt denominated in their various central bank currencies. A "Global Coin" for a "Global Village."
I continue to be impressed with the philosophy of Bitcoin and its crypto avatars, which were developed in open source, preserve anonymity and try to offer sovereignty to the smallest unit that exists, the individual. But a Facebook State, designed in the shadows of confidentiality clauses, seems like it would be something else entirely.
It may become impossible to function in society without a Facebook account.
Mark Zuckerberg has done well to give assurances that his currency would be open and encrypted. And yet, I don't see how he will resist the temptation to complete his formidable siphoning enterprise by integrating business data and thus making our personal transactions traceable. His metaphor to sending a photo speaks for itself: To whom do we really send photos posted on Facebook? To what extent is that question really up to the website's algorithm?
It could soon become impossible to function in society without a Facebook account, as I still do. As the social network becomes an entire business world, it will aggregate our contacts, our opinions, our purchases and our incomes to know us even more intimately. It will offer us jobs, health insurance and virtual coaches, compensating us in these ways for what we lose in autonomy.
It won't even be necessary for the police to control us. Not when we're already controlled by a "personal score" on Facebook, a private-sector reinvention of the "social credit" that communist China imposes by force.
What Facebook has prepared, under the guise of financial innovation and technological disruption, is a stranglehold of unprecedented scale. It will impact the lives of billions of people. And it must be stopped immediately.