Libra will fail for 2 reasons

[Anonymous No.14223084]

1. FX Volatility and Margin
Libra will be pegged to a basket of cash and short term highly liquid securities from highly rated countries (USD, GBP, EUR, CHF etc etc). However, this does not account for the risk of FX rate volatility in those currencies.
For example, on Day 1 you might have 100m Libra coins which is backed by the equivalent of 100m USD (after translation) worth of cash and securities, but this is spread across the above currencies. Therefore, 1 Libra = 1USD equivalent. Now imagine that GBPUSD falls (i.e. 1 GBP buys less USD than the day before). If we convert all of our cash and securities back to USD again, we find that we now have less than 100m USD equivalent since our GBP cash and securities have declined. As a result, 100m Libra tokens are now worth 99.8m USD, therefore 1 Libra now only equals 0.998 USD.
The inverse is true if we translated all our cash and securities into GBP. Since the USD has gained against GBP, our cash and securities are now worth more in GBP than the day before.
As a result, owners of Libra will see fluctuations in the value of their coins as a result of changes in FX rates.

[Anonymous No.14223090]

Libra will also have issues as a result of having to convert foreign currency into one of the above currencies in order to hold it as security. For example, anon in Nigeria wants to buy Libra and does so using Nigerian Naira. As a result, Facebook has to take that Naira and convert it into USD, GBP, EUR etc etc and hold it. On this conversion, the bank will take a margin, and it will be quite steep since banks do not want to hold large amounts of Naira, and trading in many smaller currencies can be quite illiquid.
Who’s going to take the cost of the conversion margin on the Naira? Not Facebook, it will be passed onto the consumer. Facebook won’t be able to resist gouging its users on FX conversion margins if they’re onboarding fiat in a currency that isn’t one of the ones used for cash/securities. They will charge a margin to the user over and above what the bank will charge them, and it will happen on both buying and selling Libra coins.

[Anonymous No.14223105]

Finally, Libra will fail once people realise that Facebook and its partners are in it for the free cash it provides. When you buy Libra coins, your fiat will be held as a backing for those coins. However, Facebook and its partners will earn interest on that fiat and they will keep it for themselves. It’s a cash cow for them, all they do is deposit your fiat in short dated securities and generate a return from it. Every dollar spent buying Libra instead of being in your own bank account generates interest for Facebook and reduces the interest you earn.
Now what about in a negative interest environment (i.e. EUR) where you pay to have your funds on deposit? Do you think Facebook and partners will be happy to take the loss they make by holding your fiat in such an environment? Of course not, they’re going to pass those costs onto you as part of the margin they charge when you buy/sell Libra. It’s a win/win for them, in a positive interest rate environment they keep the gains, in a negative interest rate environment they pass the cost onto the consumer.
This is why banks are unhappy and speaking out against Libra already, as instead of individual people having deposits with the banks (where the banks can use their size to ensure they make a margin) it will be instead Facebook with a ton of extra cash, which gives them a lot more power when negotiating deposit rates.

[Anonymous No.14223125]

tl;dr?

[Anonymous No.14223181]

interesting take. good post.
Normies wont care. They dont care about 0 interest with paypal either

[Anonymous No.14223358]

[Anonymous No.14223475]

>>14223125
Sorry was busy with something else.
Basically, users are still exposed to FX risks and Facebook will be unable to stop themselves from gouging on the margin it charges when buying/selling Libra.
There will also be an outcry when people realise that Facebook will be sitting on a monumental amount of users cash that it will be generating free interest off.

[Anonymous No.14223488]

https://biblehub.com/revelation/13-17.htm

The Mark of the Beast
16 And the second beast required all people small and great, rich and poor, free and slave, to receive a mark on their right hand or on their forehead, 17
>so that no one could buy or sell unless he had the mark— the name of the beast or the number of its name.

[Anonymous No.14223512]

>>14223084
fuck. go write an essay faggot.

[Anonymous No.14223594]

>>14223084
this and govs will ban use of libra.

Zucks btfo in 1 year, screencap now

[Anonymous No.14223641]

>>14223475
>it will be generating free interest off.
wtf so its just like fiat?

[Anonymous No.14223662]

Normies dont give shits about crypto
Anons who give shits about crypto dont give a shit about cuckbook
Plus stable coin, nobody who loves $ gives a shit about stable coins
Whats the big deal?
Redpill me on being scared

[Anonymous No.14223684]

>>14223641
You are technically giving your cash to zucc and his cronies to make money off of while you hold some digital shitcoin that offers nothing new

[Anonymous No.14223742]

>>14223594

that's probably the biggest worry.

tying crypto to facebook and bringing it into a more negative light.

>tfw facebook is potentially more damaging than silk road.

[Anonymous No.14224020]

>>14223084
>However, this does not account for the risk of FX rate volatility in those currencies.

1. They probably really only peg to dollar and adjust accordingly. I bet those baskets are there to assuage the global feeling of uncertainty, and to recognize that all currencies are considered. Having it be an index seems like a clusterfuck.
2. If a currency drops in value against others, at time of cashout, they'll most likely eat that minor cost. That's a minor downside to the billions and billions of dollars they'll now have from printing money all based on the trust of the brand name. It is a new type of business model afterall). This seems like a non issue and is has obviously been considered and not a reason for failure. Look at Tether, or USDC or anything else, the pegging returns to normal and the cap is always increasing as new money enters the system. Facebook is not dumb.

> When you buy Libra coins, your fiat will be held as a backing for those coins. However, Facebook and its partners will earn interest on that fiat and they will keep it for themselves. It’s a cash cow for them, all they do is deposit your fiat in short dated securities and generate a return from it. Every dollar spent buying Libra instead of being in your own bank account generates interest for Facebook and reduces the interest you earn.

unfortunately, that is correct. And it probably won't be 100% backed and fractionally backed, so that's fuck tons of money to do whatever the fuck they want. And it's no wonder banks and governments will speak out, they risk being disrupted and dethroned.

[Anonymous No.14224195]

>>14224020
I'm curious to hear your thoughts on how you would balance the different baskets in order to account for the change in FX rates and ensure 1 Libra always equals the equivalent of 1 USD. The only way I can see is some form of Libra print/burn that occurs. If an similar event like BREXIT or the CHF being unpegged occurs which causes a big movement in FX rates, it's going to be tough to quickly bring the total USD value of the baskets back into alignment with the number of tokens.

[Anonymous No.14224301]

>>14223084
the way you reason makes no sense man
>As a result, 100m Libra tokens are now worth 99.8m USD
wrong, they are still 100m USD, you just swing traded for GBP and bought back 98m Libra tokens instead of 100m
how the fuck OP lacks basic math skills?

[Anonymous No.14224322]

>>14223090
>anon in Nigeria
Top tip: we WANT anon in Nigeria to be fucked by fb for all his scams. Remember your audience.

If it was based favelanon, for instance ... Facebook won’t be going to market over 10 Brazilian Real. They’ll go over 10 million and assign part of the lower cost to anon. Anon has still paid less thN now to get into usd

[Anonymous No.14224368]

>>14224301
Say you have 100m USD, but you want to spread it 50/50 between USD & GBP cash/securities. Assume GBPUSD rate = 1.30 therefore 50m USD converts to 38.46m GBP.
Now GBPUSD rate falls to 1.20 and you still hold 38.46m GBP worth of cash/securities. Convert this back to USD @ 1.20 gives 46.15m USD. Add this to the other 50m USD that you held onto, and you get 96.15m USD. You've technically lost 3.85m USD due to movements in the GBPUSD exchange rate.

[Anonymous No.14224389]

>>14223090
Say No To Libra

[Anonymous No.14224473]

Libra only has to insert itself into the financial space so that when fiat currencies are crashed with no survivors all that’s left is Libra and the satanists have their one world currency

[Anonymous No.14224504]

>>14223488
You know what would be funny?
New crypto regulations that mandated every crypto account to have kyc, and one of the kyc rules is to take pics of your face or right hand, with a certain mark on the forehead or hand in the process
Would be hilarious to see people freak out over that

[Anonymous No.14224508]

>>14223181

[Anonymous No.14224511]

>>14223084
My question is, will Bitcoin become the myspace of Cryptocurrencies, or will it take off as more people are exposed to them?

[Anonymous No.14224749]

>>14223105
>However, Facebook and its partners will earn interest on that fiat and they will keep it for themselves. It’s a cash cow for them, all they do is deposit your fiat in short dated securities and generate a return from it.

HOLY SHIT, you just taught all of us how banks work. Jesus Christ, I expected more.

[Anonymous No.14224785]

>>14223084
Please let's stop even posting about this shit coin. We already know it's pointless garbage.

[Anonymous No.14224835]

>>14223662
is that pepe using pale moon?

>>14223358
who dat?

[Anonymous No.14224901]

>>14224749
Think of the scale though anon. If Libra is used by billions of users, then Facebook could potentially have more cash reserves than any bank in the world, yet won't be required to adhere to any of the current banking regulations around how it holds capital.