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Billionaire businessman Mark Cuban called Facebook’s launch of Libra and its foray into cryptocurrency a “big mistake” in a interview with CNBC. He joined Verge editor-in-chief Nilay Patel to further discuss his views on Libra and why he regards the new venture as “dangerous.”
Patel and Cuban also discuss artificial intelligence, net neutrality, breaking up Big Tech, investment opportunities that Cuban’s excited about right now, and more in the latest episode of The Vergecast. Below is a lightly edited excerpt of the conversation.
So let’s start with Libra because you literally were on CNBC recently and said, “It’s a big mistake, and it’s dangerous.” I actually agree with you, but go ahead and explain why.
Mark Cuban: I’m not against cryptocurrency at all. I’m not against the distributed nature of cryptocurrency. I think the idea that there’s no central control is kind of overblown because there are so many forks and there are so many changes and administrational issues that you know there’s always some external factor forcing control. But the problem I have with Facebook is that Facebook is in a unique position with over 2.2 billion worldwide users.
By having those tentacles everywhere globally, they have the opportunity to be more impactful in countries where there is less stability. And when you get a company like Facebook, with the power and leverage and the financial resources that they have, putting their tentacles into — not to pick on Africa, but African countries that have less stable currencies and governments — that can create issues that can lead to people dying. And so if Facebook were to say, “We’re going to start off the United States with Libra” or “We’re going to start off in the United States and Canada and Western Europe.” Fine, go for it. Let’s see what happens. But when you look to extend that into 2.2 billion users globally, the law of unintended consequences is inevitable, and most likely, it’s going to be a negative output.
And as I said in the CNBC interview, I think people will die as a result because when you start impacting a despot’s currency manipulation opportunities and their ability to tax and control what they can in their countries, that’s when despots tend to take matters into their own hands and people die.
Do you think this would be a different kind of conversation if it wasn’t Facebook proposing such a thing?
You could pick Company X that had 2.2 billion users globally, and I’d say the same thing.
So why do you think they’re pushing it so hard?
If you question Facebook’s ability to monetize personal data, and you think that there’s a risk that it could go away, what other ways can they leverage 2.2 billion users?
By taking a cut of transaction fees.
And creating your own worldwide global currency. What could be better than that? They’re thinking big, and I understand why they’re doing it. They’re in a unique position to literally create a global currency, and I can see why they want to do it. Whether you’re taking just a smidgen per transaction or you get to be effectively the fiat currency outside the biggest countries in the world. Why wouldn’t you try that? And the reason why you wouldn’t, particularly in the types of countries I mentioned, is the risk of people dying.
So how do you think this kind of intersects with other types of crypto, such as bitcoin and Ethereum?
It doesn’t. It’s two different things. I think it’s a platform that they’re using as an excuse to go become a global currency. Think of it this way: what is the biggest play that you could ever possibly conceive of? Creating your own global currency. What does not exist right now? A global currency. The United States dollar is kind of a fiat global currency that’s accepted everywhere, but it’s not digital. It’s not like they use bitcoin and said, “You know what? There’s already a base here. We’re going to support it, and we’re going to extend it by allowing it to be used with transactions on Facebook globally.”
No. The biggest part of their user base is on lower-powered phones with minimal connectivity and in places around the globe that use their phones as the bank. Global currency domination is the way I see it. And I’m not necessarily against that, per se. More power to them for putting themselves in a position to be able to at least try it. But you have to consider what happens in the most remote elements of that currency chain if you will. And that’s where problems occur.
Source: Zachary Mack