You’d be a real Zucker to buy into Facebook’s digital currency plan Libra
IT was once the site that democratised expression. Everyone could have a published opinion on Facebook.
Now Mark Zuckerberg’s leviathan wants to democratise banking by launching a digital currency for us all, but particularly those without a bank account.
Libra will be launched next year in association with 17 other companies including Uber, Spotify, Mastercard, eBay and Vodafone.
Facebook claims Libra will make it easier, cheaper and more secure to pay for things via the internet compared with bank cards or other forms of payment.
Libra can be sent to other users “as easily and instantly as a text message”. It will be a shiny new global currency for the 21st Century, taking on the dollar and the Pound.
But I’m not fooled. I think we all know what Facebook is really up to.
This is yet another way to harvest data about our financial habits which it can then use for targeted marketing. Critics are already calling it the “most invasive and dangerous form of surveillance ever designed”.
Collecting and exploiting information about us is, after all, the whole reason for the company’s existence.
VALUABLE DATA
Years ago it was basic stuff, like quizzes asking, “What kind of personality type are you?”
Fill that in and you are practically begging to be targeted in marketing and political campaigns. But handing over our spending details is quite another matter.
This may be spun as connecting the world and revolutionising payments but it is really all about tapping the modern-day version of oil — the wells of data.
Facebook already knows who you are. Accept Libra and it will know what you are buying, who you’re paying and how much you have.
Will it be regulated by the UK Financial Conduct Authority, as banks are in this country? Certainly, the company has not shown much desire for regulation so far — of which more later.
But what do we know about how trustworthy, secure or morally sound this would-be money broker is?
The Cambridge Analytica scandal, where data from 87million users was shared with political consultants, led to a fine of £500,000 by Britain’s Information Commissioner’s Office.
Last September the company admitted that data from 50million of its users had leaked due to a security flaw.
In 2017 it failed to stop the live broadcast of the torture of a disabled man in Chicago. It has also refused to take down neo-Nazi content.
Facebook is under criminal investigation by US prosecutors who are looking into data-sharing deals with, among other, Amazon and Apple. It has been caught out farming data from apps whose users might have been unaware they were feeding information to Facebook.
The company was found to be harvesting the dates of female users’ periods via an app which tracked ovulation.
Facebook has also been accused of doing little to protect vulnerable children from promotions of self-harm. British father Ian Russell has directly linked Facebook-owned Instagram to the suicide of his 14-year-old daughter, Molly.
How can we be sure that Facebook will still be around in a few years’ time?
Facebook founder Mark Zuckerberg refused to attend the UK Parliament’s committee on disinformation and “fake news” last year, amid concern the social media giant is positioning itself as a news publisher but without compliance with any of the regulation or laws governing traditional journalism.
The platform has been blamed for spreading hatred. In March this year an Australian white supremacist live-streamed on Facebook his massacre of 51 people at two New Zealand mosques.
It has further been accused of putting IS terrorists in touch with each other via its “suggested friends” application.
When challenged as to why it does not do more to tackle terrorism, it falls back on the explanation that it does not have the technology to watch what its 2.4billion users are doing all the time.
Yet somehow that does not seem to stop it farming commercially valuable data from our accounts.
The same will no doubt turn out to be true about Libra. This week French finance minister Bruno Le Maire warned that the cryptocurrency would inevitably be used by terrorists and criminals to shift money around undetected.
When it happens, Facebook will no doubt shrug its corporate shoulders once more and say it is powerless to stop it.
I'M NOT BUYING IT
In theory, the very complex nature of cryptocurrencies means that it should be near impossible for anyone to steal our money.
But we have all heard the horror stories. The best-known cryptocurrency, Bitcoin, at first soared in value, making millions for people who latched on to it early. But 18 months ago it crashed.
Of course, most of us like to shop on the internet — and e-commerce is only likely to grow in the coming years.
But most of us do it with our bank cards or direct from accounts which hold our money in a currency which is backed by the central bank of a First World country.
This means we can be reasonably sure the currency won’t suddenly disappear or become valueless. It is quite another matter doing business in a currency that is backed by internet firms.
How can we be sure that Facebook will still be around in a few years’ time?
Of course, banks sometimes go bust, but at least we have some protection in the form of the Government’s financial services compensation scheme which will refund up to £85,000 of savings in the event of a failure.
MOST READ IN OPINION
Facebook claims Libra will be backed by an independent foundation in Switzerland and will be free from the kind of speculation that drove the value of Bitcoin, because its value will be linked to a basket of currencies.
But I’m sorry, I’m just not buying it. I’m sticking with sterling when I do my online shopping.
It might not be very exciting but I feel confident it will still be around well when Libra, and Facebook, have long ago disappeared.
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