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Facebook co-founder says Libra will give corporations too much power

Chris Hughes has spoken out against Facebook's cryptocurrency project, calling it "frightening."

libra-association-founding-partners

The founding partners of the Libra Association include Mastercard and Visa.

Facebook

Facebook co-founder Chris Hughes has called the possibility of success for the social network's newly unveiled cryptocurrency "frightening." Libra will shift power from central banks to corporations, he wrote in a Financial Times op-ed Friday.

Facebook earlier this week unveiled the global digital coin, which will be managed by a governing body called the Libra Association and through a wallet named Calibra. Facebook is working alongside 27 launch partners for Libra, including PayPal, Visa, Uber, Coinbase, Lyft, Mastercard, Vodafone, eBay and Spotify, but aims to have 100 members in the Libra Association by 2020.

"If even modestly successful, Libra would hand over much of the control of monetary policy from central banks to these private companies, which also include Visa, Uber, and Vodafone," he wrote Friday. "Inevitably, these companies will put their private interests -- profits and influence -- ahead of public ones."

Hughes said in the early days of Facebook as a college social network, "move fast and break things" was their mantra -- but that this is inappropriate for a global financial system.

"Libra will disrupt and weaken nation states by enabling people to move out of unstable local currencies and into a currency denominated in dollars and euros and managed by corporations," he wrote.

"The fewer rupees or lira a country's citizens hold, the less power the national central bank has to set monetary policy, making it harder to stimulate the local economy in times of economic stress."

Libra can be used to purchase products, send money internationally and make donations, and is set to launch in the first half of 2020. 

A Facebook spokesperson told CNET in an emailed statement that the company looks forward to responding to lawmakers' question as the process moves forward.

Hughes in May said Facebook CEO Mark Zuckerberg has too much power, and that the social network has become a monopoly. Writing an op-ed in The New York Times, Hughes called for the company's breakup.

"We are a nation with a tradition of reining in monopolies, no matter how well-intentioned the leaders of these companies may be. Mark's power is unprecedented and un-American," Hughes said in the op-ed.

Hughes left Facebook back in 2007.

Originally published June 21 at 1:30 p.m. PT.  
Update, 2:26 p.m. PT: Adds statement from Facebook.
Correction, 2:59 p.m. PT: Libra will launch in the first half of 2020, not the second half of 2020. 
Update, 4:02 p.m. PT: Adds info on Hughes calling for Facebook's breakup.

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