Facebook’s Libra cryptocurrency will be blocked in Europe
France has said it will block the development of Facebook‘s Libra cryptocurrency as it poses a threat to “monetary sovereignty”.
At the opening of an OECD conference on cryptocurrencies, French Economy and Finance Minister Bruno Le Maire said: “I want to be absolutely clear: In these conditions, we cannot authorise the development of Libra on European soil.”
Facebook’s Libra cryptocurrency was announced earlier this year and is set to launch at some point in 2020. Despite certain technological similarities with bitcoin, Libra’s creators hope that its more centralised infrastructure will allow it to become a global currency that could rival the US dollar.
It is designed to allow people to make payments across Facebook’s suite of apps, including WhatsApp and Facebook Messenger, which are used by billions of people around the world.
It has been developed alongside some of the world’s biggest payment companies but has faced significant regulatory scrutiny in the US, UK and Europe.
Libra chief David Marcus gave evidence in July before the Senate, Banking, Housing and Urban Affairs Committee, with US senators telling him that Facebook “doesn’t deserve our trust” and “should be treated like the profit-seeking corporation that it is”.
Later that month, UK politicians expressed their reservations about the project.
Damian Collins, chairman of the Digital, Culture, Media and Sport Committee told Financial News: “To me, [Libra] suggests that Facebook’s almost trying to turn itself into its own country.
“It’s a global organisation that doesn’t have physical boundaries but basically has a global community who are solely under the oversight of Mark Zuckerberg.”
Facebook has previously said it will hold back from launching Libra until it has satisfied concerns of regulators around the world.
In response to the latest developments, Libra’s head of policy and communications Dante Disparte said Mr Le Maire’s comments “further underscore the importance” of working with regulatory bodies.
“In the nearly three months since the intent to launch the Libra project was announced, we have become the world’s most scrutinised fintech effort,” he told TechNews.
“We welcome this scrutiny and have deliberately designed a long launch runway to have these conversations, educate stakeholders and incorporate their feedback in our design… We recognise that blockchain is an emerging technology, and that policymakers must carefully consider how its applications fit into their financial system policies.”