# Let's talk about private scrip & Facebook's upcoming attempt at it **URL:** \ **Category:** Great Debates\ **Created:** [June 18, 2019, 4:23pm UTC](https://boards.straightdope.com/t/lets-talk-about-private-scrip-facebooks-upcoming-attempt-at-it/835690 "2019-06-18T16:23:00Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![l0k1](https://avatars.discourse-cdn.com/v4/letter/l/bb73d2/32.png) [@l0k1](https://boards.straightdope.com/u/l0k1)\ **Post date:** [June 20, 2019, 7:09pm UTC](https://boards.straightdope.com/t/lets-talk-about-private-scrip-facebooks-upcoming-attempt-at-it/835690/41 "2019-06-20T19:09:39Z")
I read a little more about their plan. The gist is that for every Facebuck in circulation, the value of that Facebuck will be held in reserve by Facebook with unnamed securities. Any Facebuck would be redeemable in local currency. There plan seems to be, give us money, we invest money, we keep interest on said investment, you get a gift card. It doesn’t sound like a great investment choice for end users, but probably better than Beenie Babies or Baseball Cards. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [June 20, 2019, 7:28pm UTC](https://boards.straightdope.com/t/lets-talk-about-private-scrip-facebooks-upcoming-attempt-at-it/835690/42 "2019-06-20T19:28:20Z")
The anecdote about my son’s inability to open an account at a rural Thai bank even though he is a Thai citizen is true, but OFF-TOPIC. I might discuss the incident in more detail in a Mundane or IMHO thread … but the snippish answers I got here incline me against that. I mentioned it here as an example of financial controls, and _because I’m curious how many of you realize that bank and stockbroker customers all over the world are being asked about their U.S. tax status._ Many American expats here in Thailand are unaware of it, and wouldn’t be unless they opened a new account during the five years or so these new rules have been in effect. The usual solution, BTW, is “Don’t ask don’t tell!” The bank would be happy to open the account (on presentation of Thai ID) if we answered “No” to the citizenship question (or more typically just not have asked the question at all), but my son _will use this account to receive direct deposits from the U.S. Government that he’s entitled to as a U.S. person_. Not informing the U.S.G. of the U.S. status of this account-holder would be pushing our luck, no? There are further details to the story but, as I say, it’s off-topic and the comments here, mostly quite WRONG, don’t motivate me. I’ll correct one specific confusion: > [@Slash1972](#): > > It took two hours to ask the manager “Do you open accounts for US citizens?”? I asked this question at 2:30 pm and got the answer Yes after less than a minute. I drove to pick up my son, returned with him to the bank, watched them lock the door at 3:30 pm, and finally learned we wouldn’t be able to open an account at 4:55 pm. (My son was proud of me for not losing my temper! 😛 ) The bank spent about 4 man-hours working on this(!) since there were sometimes 2 or 3 officers trying to help and they were constantly on the phone to headquarters. Does this help, **manson1972**? Do I guess correctly that you’ve not done a lot of banking in rural Thailand? ---
**Author:** ![GreenWyvern](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/greenwyvern/32/2834_2.png) [@GreenWyvern](https://boards.straightdope.com/u/GreenWyvern)\ **Post date:** [June 20, 2019, 7:38pm UTC](https://boards.straightdope.com/t/lets-talk-about-private-scrip-facebooks-upcoming-attempt-at-it/835690/43 "2019-06-20T19:38:33Z")
From the [Guardian](https://www.theguardian.com/commentisfree/2019/jun/19/facebook-new-cryptocurrency-currency-libra): > [@](#): > > “From the beginning, Calibra will let you send Libra to almost anyone with a smartphone, as easily and instantly as you might send a text message and at low-to-no cost,” says the Facebook announcement. > > At this, tens of millions of people in Africa, India and Afghanistan will roll their eyes. They’ve been sending money – real money, not tokens – to each other on mobile phones (not even smartphones) since 2007 via SMS, using the M-Pesa system, which doesn’t require banks or Facebook. > > What else? “In time, we hope to offer additional services for people and businesses, like paying bills with the push of a button, buying a cup of coffee with the scan of a code or riding your local public transit without needing to carry cash or a metro pass.” > > Of course, millions of people across Europe and Asia already do this every day, paying with their phone or even smartwatch. To know why Facebook thinks this is revelatory you have to understand that the US has only recently shifted from swiping credit cards to chip-and-pin; people in shops there look at you strangely if you wave your phone at the card reader. > > And as for “paying bills with the push of a button”, only those ensconced in the primitive US banking system could think that was smart. ---
**Author:** ![Snowboarder\_Bo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/snowboarder_bo/32/229_2.png) [@Snowboarder\_Bo](https://boards.straightdope.com/u/Snowboarder_Bo)\ **Post date:** [June 20, 2019, 8:52pm UTC](https://boards.straightdope.com/t/lets-talk-about-private-scrip-facebooks-upcoming-attempt-at-it/835690/44 "2019-06-20T20:52:28Z")
[Lawfare’s Nicholas Weaver agrees that this is a bad idea](https://www.lawfareblog.com/facebooks-cryptocurrency-stop-it-it-starts), and he lays out lots of reasons why; for example: > [@](#): > > Fortunately for the rest of the world, Libra may well fail. People prefer assets that hold their value relative to either the local currency or, in an unstable situation, dollars or euros. Nobody wants to receive $10 from a friend only to have it turn into $9.80. But since Libra pegged is to a basket of currencies, it is not actually stable. > [@](#): > > A similar problem exists for all validator nodes. Even non-U.S. companies need to respect U.S. KYC/AML restrictions if transactions end up involving U.S. persons. The founders of Liberty Reserve learned this lesson when they pleaded guilty to money laundering and received 20-year sentences. But how can firms do KYC/AML on pseudonymous transactions? > > This makes Libra’s permissioned-based system, where the validators are known, preselected, and responsible, fundamentally incompatible with the pseudonymous nature of a cryptocurrency. The U.S. Treasury’s Financial Crimes and Enforcement Network (FinCEN) should remind all members of the Libra Foundation of these requirements. Each validator node that accepts transactions from participants should be held accountable for ensuring that the transactions meet KYC/AML requirements. That it can’t actually be done while maintaining pseudonymity is not FinCEN’s problem. > [@](#): > > Libra succeeding would be far worse. What currently limits how criminals can use cryptocurrencies is the cost of currency exchange and the inherent volatility of the currency’s value. Reduce or eliminate these constraints, and there’s likely to be an inundation of new ransomware, extortion and online drug trade. Libra intends to reduce (but doesn’t eliminate) volatility, and the only way Facebook can get widespread adoption is through making easy onramps and offramps. A Libra “success” would represent a huge policy failure. It is better to kill this now than let it even get a chance to succeed. ---
**Author:** ![Isamu](https://avatars.discourse-cdn.com/v4/letter/i/7c8e57/32.png) [@Isamu](https://boards.straightdope.com/u/Isamu)\ **Post date:** [June 21, 2019, 12:57am UTC](https://boards.straightdope.com/t/lets-talk-about-private-scrip-facebooks-upcoming-attempt-at-it/835690/45 "2019-06-21T00:57:36Z")
> [@iamthewalrus\_3](#): > > I don’t think that’s true. > > American Airline miles are a fiat currency controlled by American Airlines. You can buy all sorts of stuff with them, world-wide, and those purchases can’t be monitored by the government without the cooperation of American Airlines. No one seems to care much. > > Also, agreed that we should all call them Facebucks. Points are not a currency. ---
**Author:** ![l0k1](https://avatars.discourse-cdn.com/v4/letter/l/bb73d2/32.png) [@l0k1](https://boards.straightdope.com/u/l0k1)\ **Post date:** [June 21, 2019, 1:01am UTC](https://boards.straightdope.com/t/lets-talk-about-private-scrip-facebooks-upcoming-attempt-at-it/835690/46 "2019-06-21T01:01:00Z")
> [@Isamu](#): > > Points are not a currency. What about Chuck E Cheese Tokens? ---
**Author:** ![Slash1972](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/slash1972/32/6461_2.png) [@Slash1972](https://boards.straightdope.com/u/Slash1972)\ **Post date:** [June 21, 2019, 1:04am UTC](https://boards.straightdope.com/t/lets-talk-about-private-scrip-facebooks-upcoming-attempt-at-it/835690/47 "2019-06-21T01:04:20Z")
> [@septimus](#): > > Does this help, **manson1972**? Do I guess correctly that you’ve not done a lot of banking in rural Thailand? You’d be incorrect in that guess. But he couldn’t open an account because he was a US citizen, or because the place was closed? ---
**Author:** ![l0k1](https://avatars.discourse-cdn.com/v4/letter/l/bb73d2/32.png) [@l0k1](https://boards.straightdope.com/u/l0k1)\ **Post date:** [June 21, 2019, 1:10am UTC](https://boards.straightdope.com/t/lets-talk-about-private-scrip-facebooks-upcoming-attempt-at-it/835690/48 "2019-06-21T01:10:33Z")
> [@Slash1972](#): > > You’d be incorrect in that guess. > > But he couldn’t open an account because he was a US citizen, or because the place was closed? Trying to read between the indignation, it sounds to me like his son tried to open a business account that could do international wire tranfers to and/or from the US, and the bank decided that the cost of compliance with US banking regulations made this an unprofitable venture, and so the banks corporate office said no. Somehow this was due to the onerous requirement that his son fill out a W9. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [June 21, 2019, 8:57am UTC](https://boards.straightdope.com/t/lets-talk-about-private-scrip-facebooks-upcoming-attempt-at-it/835690/49 "2019-06-21T08:57:38Z")
> [@l0k1](#): > > Trying to read between the indignation, it sounds to me like his son tried to open a business account that could do international wire tranfers to and/or from the US, and the bank decided that the cost of compliance with US banking regulations made this an unprofitable venture, and so the banks corporate office said no. > > Somehow this was due to the onerous requirement that his son fill out a W9. Wrong again. _Totally wrong.__ **Shall we bet?** _ Put money in escrow and get affadavits from the bank’s headquarters management? ---
**Author:** ![l0k1](https://avatars.discourse-cdn.com/v4/letter/l/bb73d2/32.png) [@l0k1](https://boards.straightdope.com/u/l0k1)\ **Post date:** [June 21, 2019, 1:03pm UTC](https://boards.straightdope.com/t/lets-talk-about-private-scrip-facebooks-upcoming-attempt-at-it/835690/50 "2019-06-21T13:03:06Z")
> [@septimus](#): > > Wrong again. _Totally wrong.__ **Shall we bet?** _ Put money in escrow and get affadavits from the bank’s headquarters management? I bet you aren’t very good at telling an anecdote. Do you want to explain directly, and without hurt feelings and invective what happened and how it relayes to the onerous US banking regulations that only expats understand? ---
**Author:** ![slash2k](https://avatars.discourse-cdn.com/v4/letter/s/439d5e/32.png) [@slash2k](https://boards.straightdope.com/u/slash2k)\ **Post date:** [June 21, 2019, 3:08pm UTC](https://boards.straightdope.com/t/lets-talk-about-private-scrip-facebooks-upcoming-attempt-at-it/835690/51 "2019-06-21T15:08:10Z")
> [@l0k1](#): > > Please site a case where someone was charged with perjury for failing to disclose to a bank teller their citizenship status. Why are you making such a big deal about the teller, instead of why the teller is asking? Forget about the bank teller. When preparing forms required by your jurisdiction’s regulators, he or she is only acting on behalf of those regulators, so lying on the forms is considered lying _ **to the regulators directly** _. Lying to government regulators gets people charged with criminal acts (in the US, typically violations of 18 U.S.C. § 1001 et seq.; I don’t know what the Thai equivalent is). For an equivalent domestic example, try stating on the paperwork you give the bank teller that you are not subject to backup withholding when you really are. See how Uncle Sam responds if/when they catch you. > [@l0k1](#): > > I don’t know why you are making such a big deal out of this. A bank made a business decision not to allow a business to open a commercial account. It sounds like you’re having an issue with capitalism. Where are you getting anything about this being a business trying to open a commercial account? I read this to be something more along the lines of an individual trying to receive Social Security benefits or the like. ---
**Author:** ![l0k1](https://avatars.discourse-cdn.com/v4/letter/l/bb73d2/32.png) [@l0k1](https://boards.straightdope.com/u/l0k1)\ **Post date:** [June 21, 2019, 4:49pm UTC](https://boards.straightdope.com/t/lets-talk-about-private-scrip-facebooks-upcoming-attempt-at-it/835690/52 "2019-06-21T16:49:01Z")
> [@slash2k](#): > > Where are you getting anything about this being a business trying to open a commercial account? I read this to be something more along the lines of an individual trying to receive Social Security benefits or the like. Post #33 I think perjury was hyperbolic, so I riffed on it. The US government has a legitimate interest in protecting the US banking system, and in collecting taxes. In pursuit of those two interests, they require Americans living abroad to report income, including interest earned from banking. A banking institution would file a 1098 to the IRS and a 1099 to the individual. In order to file those documents the bank would need to know the individual’s tax ID number. The form for this is the W9. They also require foreign banks to comply with certain regulatory oversight in order to wire transfer funds between US banks and foreign banks. Once money is in the US banking system, it is generally accepted to be legal money. The reason that everyone can accept this is due to regulatory oversight. If a rural Thai bank cannot comply with US banking regulations, then they can’t send money into the US banking system. That seems to have inconvenienced some Americans living abroad. Having to go through customs upon returning from a vacation inconveniences me, but I understand why we have customs. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [June 21, 2019, 7:04pm UTC](https://boards.straightdope.com/t/lets-talk-about-private-scrip-facebooks-upcoming-attempt-at-it/835690/53 "2019-06-21T19:04:47Z")
> [@l0k1](#): > > I bet you aren’t very good at telling an anecdote. You’re right. 🙂 I do a much better job though when my credibility isn’t repeatedly insulted. Almost all the guesses have been quite wrong. For example, most of the accounts of the larger retail banks here can easily accept direct deposits or wire transfers from the U.S. AFAICT. There were reasons I omitted some interesting details from the bank-account(s) anecdote. The reasons for the omissions, sorted in decreasing importance are: (a) brevity, (b) the details were completely unrelated to my anecdote’s relevance to the thread, (c) other details, incl. personal or confidential. I hope those who need to continue this discussion will open a new thread: in Mundane or, preferably, BBQ Pit. If someone insists on guessing any specific obstacle(s) that I suppressed for personal reasons, please PM me your guess. AtDhVaAnNkCsE. ---
**Author:** ![CoastalMaineiac](https://avatars.discourse-cdn.com/v4/letter/c/e8c25b/32.png) [@CoastalMaineiac](https://boards.straightdope.com/u/CoastalMaineiac)\ **Post date:** [June 22, 2019, 5:58pm UTC](https://boards.straightdope.com/t/lets-talk-about-private-scrip-facebooks-upcoming-attempt-at-it/835690/54 "2019-06-22T17:58:26Z")
> [@Isamu](#): > > If it is going to be just like a fiat currency, just instead of being controlled by a country, it is controlled by Facebook, then the US (and other countries) will have to find a way to nix it. Otherwise it would mean that global transactions could no longer be monitored by the government without the cooperation of Facebook. It’s good for the general public, but terrible for the government tax offices. Once your money goes off-grid and in to facebucks (let’s face it, that’s the better name - thanks Turnip) it is invisible. The vast majority of my transactions are already invisible to the government, and I am using a system that is sponsored by that very government. 😛 The United States dollar still has physical forms in the form of 1¢, 5¢, 10¢, 25¢, 50¢, and $1 coins; and $1, $2, $5, $10, $20, $50, and $100 banknotes. To my knowledge, there is no system of monitoring what those banknotes are exchanged for, and since I seldom buy anything on-line, and won’t use a credit or debit card for anything I buy at a store, I’d wager that the only transactions of mine that are visible to the government are my employer’s direct deposits into my bank account, the three checks I have to write each month for my monthly bills, and the once-per-month cash withdrawal I make at the teller. Although the reason for this is not because I’m worried that the powers that be will see that I chose the chips and soda instead of the fresh vegetables, or whatever else they might want to learn about me from my purchasing habits. The reason is because people tend to spend more frivolously with any method of payment that isn’t physical cash ([cite](http://money.com/money/4410238/pay-with-cash-value-of-money-study/)), and I have found that to be at least partially true for myself. ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [June 24, 2019, 7:21pm UTC](https://boards.straightdope.com/t/lets-talk-about-private-scrip-facebooks-upcoming-attempt-at-it/835690/55 "2019-06-24T19:21:37Z")
> [@Isamu](#): > > Points are not a currency. If you say so, I guess? In what way are they not a currency? You can buy things with them. You can transfer them to others. You can “earn” them in a variety of ways. What’s your definition of currency? Are Facebucks a currency? If so, what do they have that airline points lack? ---
**Author:** ![Snowboarder\_Bo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/snowboarder_bo/32/229_2.png) [@Snowboarder\_Bo](https://boards.straightdope.com/u/Snowboarder_Bo)\ **Post date:** [June 25, 2019, 1:05am UTC](https://boards.straightdope.com/t/lets-talk-about-private-scrip-facebooks-upcoming-attempt-at-it/835690/56 "2019-06-25T01:05:47Z")
> [@iamthewalrus\_3](#): > > If you say so, I guess? > > In what way are they not a currency? You can buy things with them. You can transfer them to others. You can “earn” them in a variety of ways. > > What’s your definition of currency? Are Facebucks a currency? If so, what do they have that airline points lack? I also raised an eyebrow at that post and would be curious to hear **Isamu** ’s answers to these questions. ---
**Author:** ![asahi](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/asahi/32/8693_2.png) [@asahi](https://boards.straightdope.com/u/asahi)\ **Post date:** [July 2, 2019, 2:34pm UTC](https://boards.straightdope.com/t/lets-talk-about-private-scrip-facebooks-upcoming-attempt-at-it/835690/57 "2019-07-02T14:34:40Z")
I just had a random thought (might have been mentioned already, but hell, it seemed original to me): what if the aim here is to create an entirely new type of virtual society or virtual state. The first step is to create a real marketplace with real trade and real economic systems. Facebook wants to use its “currency” to facilitate commerce via its platform. This is probably not really a major revelation, but the potential scale of it is something that could have a profound impact, particularly if others like Amazon or Google respond in kind. But what if there were one company that dominated social media, dominated search, and dominated buying and selling online? And what if that company had its own currency? In some regards, it would have as much economic power as many nation-states in existence today. And with the amount of data and information that it has about each individual, the potential for corruption and control would be difficult to resist, I would think. ---
**Author:** ![Snowboarder\_Bo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/snowboarder_bo/32/229_2.png) [@Snowboarder\_Bo](https://boards.straightdope.com/u/Snowboarder_Bo)\ **Post date:** [July 3, 2019, 4:00am UTC](https://boards.straightdope.com/t/lets-talk-about-private-scrip-facebooks-upcoming-attempt-at-it/835690/58 "2019-07-03T04:00:13Z")
> [@asahi](#): > > I just had a random thought (might have been mentioned already, but hell, it seemed original to me): what if the aim here is to create an entirely new type of virtual society or virtual state. The first step is to create a real marketplace with real trade and real economic systems. Facebook wants to use its “currency” to facilitate commerce via its platform. This is probably not really a major revelation, but the potential scale of it is something that could have a profound impact, particularly if others like Amazon or Google respond in kind. But what if there were one company that dominated social media, dominated search, and dominated buying and selling online? And what if that company had its own currency? In some regards, it would have as much economic power as many nation-states in existence today. And with the amount of data and information that it has about each individual, the potential for corruption and control would be difficult to resist, I would think. Aye; we’re at the cusp of a change in bloc ideation. China, IMO, isn’t even prepared for it. Immortal persons (companies) will be a challenge for geographically contained blocs to overcome. I mean, how do you contain an immortal entity that has no form and exists simultaneously around the globe in many unique single entities? I dunno if that’s the goal of the people involved in this, but this is a way to chip away at nations’ sovereignty. And once the chips start flying, well, I’m not sure they’ll stop for a long, long time. Who’s gonna be in charge: the people with the money or the people? ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [July 3, 2019, 2:39pm UTC](https://boards.straightdope.com/t/lets-talk-about-private-scrip-facebooks-upcoming-attempt-at-it/835690/59 "2019-07-03T14:39:47Z")
> [@Snowboarder\_Bo](#): > > Aye; we’re at the cusp of a change in bloc ideation. China, IMO, isn’t even prepared for it. Immortal persons (companies) will be a challenge for geographically contained blocs to overcome. I mean, how do you contain an immortal entity that has no form and exists simultaneously around the globe in many unique single entities? > > I dunno if that’s the goal of the people involved in this, but this is a way to chip away at nations’ sovereignty. And once the chips start flying, well, I’m not sure they’ll stop for a long, long time. Who’s gonna be in charge: the people with the money or the people? The nationalists (both left and right) will throw a fit, but libertarians have predicted for some time that this could and should happen. Governments are no match for capital, the Cold War proved that. > **[Samuel Edward Konkin III](https://en.m.wikipedia.org/wiki/Agorism)** > > Samuel Edward Konkin III (8 July 1947 – 23 February 2004), also known as SEK3, was a Canadian-American left-libertarian philosopher and Austrian school economist. As the author of the publication New Libertarian Manifesto, he was a proponent of a political philosophy he named agorism. > Konkin was born in Edmonton, Alberta, to Samuel Edward Konkin II and Helen Konkin. He had one brother named Alan. He married Sheila Wymer in 1990 and had one son named Samuel Evans-Konkin. The marriage ended soon a... ---
**Author:** ![Kobal2](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kobal2/32/20_2.png) [@Kobal2](https://boards.straightdope.com/u/Kobal2)\ **Post date:** [July 3, 2019, 2:45pm UTC](https://boards.straightdope.com/t/lets-talk-about-private-scrip-facebooks-upcoming-attempt-at-it/835690/60 "2019-07-03T14:45:50Z")
Cyberpunky extraterritorial corporations aren’t much better than governments. In fact they’re worse in every respect. [Previous page](https://boards.straightdope.com/t/lets-talk-about-private-scrip-facebooks-upcoming-attempt-at-it/835690.md?page=2) [Next page](https://boards.straightdope.com/t/lets-talk-about-private-scrip-facebooks-upcoming-attempt-at-it/835690.md?page=4)