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France’s economic minister declared that the French government intends to block the development of Facebook’s Libra cryptocurrency in Europe because of the systematic threats it poses to financial security and stability.
During remarks at an OECD conference dedicated to cryptocurrencies, France’s Bruno Le Maire said that risks are simply too great and trust in Facebook is too low, according to French newspaper Le Figaro.
I want to be absolutely clear: In these conditions, we cannot authorize the development of Libra on European soil,” Le Maire said. He added: “The monetary sovereignty of the (European) states is in play.
Le Maire has been outspoken in recent months about his opposition to Libra. But while it appears he now wants to get all of Europe on board, it wasn’t clear from his remarks what organizational body or mechanism would be the authority to create a continent-wide ban.
Still, the remarks were the latest sign of the immense distrust still haunting Facebook.
In June, Facebook announced its cryptocurrency Libra, which it said would be governed by a global association of 28 organizations based in Geneva, Switzerland. The Libra network that enables the cryptocurrency is expected to go live in 2020.
Facebook also created Calibra, a subsidiary to build financial services for Libra, including a digital wallet that works across the company’s Messenger and WhatsApp services.
“Libra holds the potential to provide billions of people around the world with access to a more inclusive, more open financial ecosystem. We look forward to participating in the Libra network as a founding member, as well as through providing our community with access to Libra through Calibra,” said Calibra head David Marcus in a statement at the time. “We know the journey is just beginning, but together we can achieve Libra’s mission to create a simple global currency and financial infrastructure that will empower billions of people.”
But since being announced this summer, Facebook has encountered a torrent of criticism from policymakers and financial watchdogs at home and abroad.
At Congressional hearings in July, Senators heavily bashed the plan.
“Facebook has demonstrated through scandal after scandal that it doesn’t deserve our trust,” Democratic senator Sherrod Brown, the ranking member of the Senate Banking Committee, said in his opening remarks. “We’d be crazy to give them a chance to let them experiment with people’s bank accounts.”
U.K. officials have also expressed doubts. But France has been more vocal in its skepticism.
Over the summer, France led the creation of a G7 task force to study the impact of cryptocurrencies such as Libra and how central banks can regulate them.
According to Le Figaro’s report, Le Maire said he is disturbed by the systematic risks posed by the privatization of a currency by a company with more than 2 billion users.
“Any failure in the functioning of this currency, in the management of its reserves could create considerable financial disorder,” he said.
Le Maire also said such currencies as Libra could undercut progress made in recent years to curtail international financing of illegal and violent activities.
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