It’s easy to get swept up in the glossy jargon surrounding Facebook’s latest capital-i Idea. The social network is offering the world something called Libra that will not only serve as a “decentralized blockchain,” but also a “low-volatility cryptocurrency” and ― of course ― “a smart contract platform,” all at the same time. In a world of “high-fidelity communications,” Facebook claims, Libra will allow more people to access “the financial ecosystem.” This is, supposedly, innovation with a conscience, an alternative to “payday loans” and the “high and unpredictable fees” of the banking system. Above all, it is new, new, new. In fact, what Facebook is proposing is a really stupid investment scheme masquerading as a digital currency. It’s a proposal that immediately demands regulatory scrutiny of Facebook from every financial authority in the world. For a company that has spent the past two years engaged in mass privacy violations, accidental corporate alliances with authoritarian agitators and livestreams of outright terrorism, Facebook’s attempt to enter the world of high finance with so slipshod an idea can only be described as delusional. Mark Zuckerberg and Sheryl Sandberg clearly haven’t thought this through. Much of the so-called “white paper” describing Libra’s structure and standards consists of vague generalities. For all its cutting-edge verbiage, the outline for Libra relies on the ideas behind the gold standard that prevailed at the turn of the 20th century. Under this monetary regime, governments guaranteed that their currencies could be exchanged for a specific quantity of gold. If you had in your possession a $1 bill, you could exchange that piece of paper for 23.22 grains of gold at the U.S. Treasury, no questions asked.

Drew Angerer via Getty Images Since Facebook unveiled Libra, policymakers and thinkers have issued grave warnings about the danger of granting Mark Zuckerberg’s company the powers of a central bank.

Today, of course, nostalgia for the gold standard is for cranks, so Facebook is proposing to make Libra exchangeable not for gold, but rather “a basket of currencies and other assets.” How much of what currencies and assets? Facebook doesn’t say, specifying only that Facebook will always keep enough assets in reserve to pay out every single Libra in circulation. This is where things start getting genuinely weird. Facebook claims its reserves will include “low-risk assets,” and that Facebook will keep the interest earned on these assets for itself. Actual holders of Libra coins will leave this profit on the table. This raises some rather obvious questions. Why not just buy those assets directly and actually get paid the interest? Why give away your returns to Facebook? Why would a financial regulator allow Facebook to operate as an investment fund manager who keeps all the interest from his clients’ investments for himself? Facebook doesn’t say.

For a company that has spent the past two years engaged in mass privacy violations, accidental corporate alliances with authoritarian agitators and livestreams of outright terrorism, Facebook’s attempt to enter the world of high finance with so slipshod an idea can only be described as delusional.