“In general, Libra is a force for good,” says PayPal Co-Founder and Affirm CEO Max Levchin. “It’s a really interesting experiment. I’m glad they’re doing it in a way that isn’t just Facebook because of all the headwind that Facebook has experienced with the regulators. There are many questions to ask about the practical applications. For example, if you are buying into Libra, does that create more opportunities to do as we call it, money fraud, or not?”

Max Levchin, PayPal co-founder and Affirm CEO, discusses Facebook’s Libra cryptocurrency and how that is a good example of the use of blockchain technology in an interview on Bloomberg Technology:

Blockchain Technology Is Inevitable

I agree with David Marcus (the Co-creator of Libra and Head of Calibra) from his testimony where he very aptly pointed out that blockchain technology is inevitable. It’s been a hammer looking for nails for quite some time. We’re now starting to see real applications to the blockchain tech. I’m not speaking of Bitcoin or any one particular currency, just the idea of a public ledger is a very powerful idea. It will get put to good use. I think Libra is a good example of good use. 

The most obvious application where Libre as a concept is being brought down to an individual level is cross-border payments. You could make some very very cheap remittances happen. If you look at costs being charged by companies to send money back home from wherever you are, you will see they’re making some enormous spreads. There are plenty of startups trying to attack that, like TransferWise where I’m an investor, for example. They’ve done a wonderful job in Europe. I think Libra could potentially just massively compress fees in that market and that’ll be very good. 

Libra Is a Force For Good

In general, Libra is a force for good. It’s a really interesting experiment. I’m glad they’re doing it in a way that isn’t just Facebook because of all the headwind that Facebook has experienced with the regulators. But there are many many other questions to ask about the practical applications. For example, if you are buying into Libra, does that create more opportunities to do as we call it, money fraud, or not? It’s going to be a set of open problems for quite some time.

It’s the job of the US regulators to not trust large companies or any companies. I think their job is to audit, to regulate, and to provide equal treatment under the rule of law for everyone. Libra is a particularly interesting one because it’s not just a company, it’s Facebook’s sort of initiating this thing, and there’s this giant group of other companies coming together to govern it. So it perhaps is more complicated to regulate. 

But I think, yes, government should take an extremely active stance in regulating this thing that Libre is and will be. Within that, they should not rely on this notion that Facebook is going to be a good company. They may be and I’m sure they will be, but they’re also going to act in their best interest. That is the assumption of a smart regulator. Companies will do the thing they need to do and our job is to protect consumers and make sure of equal competition.

Breaking Up Facebook Is a Terrible Idea

The real question that lawmakers are asking about Facebook, is it too big? That’s the underlying dynamic that they’re trying to explore. That question is a much harder question to answer. It is very very big. It is bigger than most nations. So in that sense, I think they’re right. It is hard to say Facebook is too big if you step back and ask who do they compete with. If you actually compare them to, for example, Chinese companies that they go up against in a world of ad spend, companies like Tencent are just are gargantuan. And Tencent is not at risk of being broken up by the Chinese government from last I checked. If you want a Facebook to compete to with companies like Tencent successfully I think breaking them up seems like a counterintuitive thing to do.

I think Facebook and all US company should absolutely be regulated. There’s a huge difference between being regulated and abiding by the set of laws and regulations and antitrust and all the stuff that the US government’s amassed over the last couple hundred years of how to behave in a sane way in a capitalist society with the rule of law. But breaking Facebook up does, in fact, hurt its ability to compete, internationally most importantly. I think breaking it up is a terrible idea, regulating it is exactly what the US government should be doing, and they should do a better job by the way.