Unfriend... The Chairman of America's central bank visited Congress this week. Most focused on his interest rate plans — Jerome Powell strongly hinted that the Fed would lower rates to support the economy during the trade war. But he also opined on Mark Zuckerberg's latest project, Facebook's cryptocurrency "Libra." He's just not that into it.
Regulators and politicians are anti-ZuckBucks... It's not just Powell. We've seen resistance to the idea of Facebook owning an alternative financial system from all over. And it runs deep.
- 🏛 US Congress: The Financial Services Committee wants Facebook to "immediately cease implementation plans." One senator called it "Monopoly Money."
- 👔 The 27 corporate partners: Uber, Mastercard, Spotify, and other companies that paid $10M to oversee the future stablecoin with Facebook are reportedly nervous about the whole thing.
- 🌍 The world: Central bankers from China, Europe, and Singapore are all concerned. The Bank of England head won't let Facebook "learn on the job."
Facebook could actually get stopped... Since sophomore year, Zuckerberg's done what he's wanted to do. But now the Fed has set up a working group of regulators with broad political backing to investigate Facebook's financial plans. Here are Powell's concerns:
- Money laundering: FB's non-regulated financial pipes could make it easier for drug deals to go down.
- Privacy: No explanation needed.
- Consumer protection: Fraudulent schemes could run as wild on Facebook as fake news did/does, out of reach of regulatory oversight.
- Financial stability: What if Libra, the global currency, had an outage? That could spread to other markets. Worldwide. Fast.