European Regulators Stand Up To Facebook’s Crypto Libra

The Finance Minister of France, Bruno La Maire has called on a group of seven central bank governors in Europe to prepare a report on Facebook’s cryptocurrency project, Libra for their July meeting. This has become a matter of urgency after the social media giant made known its plan to launch its own cryptocurrency in 2020.

La Maire has earlier expressed his reservations about the Libra project in an interview on Europe 1 radio. He said that the digital currency, Libra should not be seen as a replacement for traditional currencies.

“It is out of question’’ that Libra “become a sovereign currency,’’ . “It can’t and it must not happen,’’ said La Maire.

Why is Government Opposing Facebook’s Libra?

Among other issues, La Maire expressed concern on how this development will affect issues such as privacy, money laundering and terrorism finance, calling for tighter regulation for the social media giant.

Libra also formed part of the discussion in the European Central Bank’s annual symposium in Sintra, Portugal. At the event, Mark Carney, the Governor of the Bank of England, while making reference to Libra said;

“Anything that works in this world will become instantly systemic and will have to be subject to the highest standards of regulation,”

Carney, while emphasizing the need to keep an open mind when analysing the implications of technologies that can facilitate cross-border money transfer noted that closer attention has to be paid to Libra and in a coordinated fashion.

Meanwhile, in his own opinion, Markus Ferber, a German member of the European parliament noted that with over 2 billion users, Facebook could become a “shadow bank”. He advised regulators to be on high alert and pay close attention to the project.

What is Facebook’s Libra All About?

Developments around Libra has further established the fact that cryptocurrencies are here to stay. None of the regulators are talking about not letting it happen. Rather, they are looking for the most appropriate means of adapting the technology without losing certain essence of humanity and at the same time still maintaining their relevance.

Libra is a stablecoin that will avoid the kind of volatility experienced with other cryptocurrencies like Bitcoin. This is expected to make it more applicable for commerce. Facebook has already partnered with some big names in technology like Visa and Uber.

The plan by Facebook is to build a new digital wallet that will exist in its Messenger and WhatsApp services to make it easy for people to send money to friends, family and businesses through the apps.

Part of La Maire’s concerns is that Libra will allow Facebook to assemble even more data, which will only increase the regulatory body’s determination to find ways of checking the internet giant.