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The big news of the week is Libra’s announcement. There’s a lot to it but this bit in particular jumped out to me:
The association is also abandoning plans for Libra to take the distinctive open architecture of Bitcoin, one of the best-known cryptocurrencies, which has a so-called permissionless quality that allows anyone to build on it. Such a design had led to widespread concerns that terrorists and others could use Libra for underhanded reasons.
Libra will now be a closed system in which only partners with the approval of the association can build infrastructure, such as wallets, for the coins.
And Jerry pointed out the key paragraph from their blog post:
In the first Libra white paper, we announced a path to eventually transitioning the network to a permissionless system. In the months since, a key concern we heard is that it would be challenging for the Libra Association to guarantee that network compliance provisions would be maintained. In the updated white paper, we present the approach we are exploring to offer new entrants the ability to compete for the provision of core network services and participate in the governance of the Libra network while ensuring the Association’s ability to meet regulatory expectations.
So it seems we will not get the permissionless Libra we hoped for. That’s too bad. For a refresher on what’s important to us, here’s a light 60 page read on that.
NY Post continued with its tradition of engagement bait articles that give everyone a good layup for quote tweet jokes.
In defiance, I decided to actually think about what they posted. If we do enter some future cashless society in which all money is managed on central bank blockchains or whatever, that would allow us to create some pretty granular rules.
Joe Weisenthal wrote a bit about this a while ago (about JPM Coin):
So what's the point? Well, it's early, but these types of fiat-backed, bank stablecoins could usher in a future of "un-fungible money." What does that mean? Well, with normal money, all dollars are basically the same. But with something like JPM Coin, money could have rules attached to it. Parents of college-age children could give them money that is only able to be spent on books or food at the cafeteria. A charity might specify in code that their dollars only go to a certain cause, and not be used for administrative expenses. Investors in a startup could, theoretically, put in dollars that only go to buy Facebook ads, and can't be used for fancy offices or the CEO's salary.
It’s not hard to imagine that in this future cashless world a member of Congress or the President could demand that stimulus dollars are invalid at liquor stores, or for foreign goods, or meat, or any of a dozen other things.
It turns out that your bank has the legal authority to seize your emergency stimulus check to pay off any debts you may have.
That journalist reached out to five banks, of which only JPM got back to say they would not take advantage of this ability. I would be shocked if any bank were dumb enough to actually seize the money from what are likely their most vulnerable customers. It would be a PR disaster. (Update: a bank was dumb enough to try it in perhaps the worst way possible)
But it is still concerning that they can do it. And a reminder that the cash in your bank account might not be as much yours as you may think.
The central bank of Lebanon is using its power over financial intermediaries to take huge cuts of remittances to the country.
In a tough economic situation like this cryptocurrencies could be useful for someone looking to preserve their wealth and/or help people back home.
There’s been a ton of talk of contact tracing lately, so I’ll get through this one quickly. Here’s something:
This is a perfect example of what I am dubbing “””private””” vs private. In this case the data is only private because humans are following rules that can be bent or broken. But I’d prefer a system where data is private because it’s not shared at all.
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