Facebook's libra is a threat to the sovereignty of nation states

Galtero Lara
Setiembre 14, 2019

"I want to be absolutely clear: In these conditions, we can not authorize the development of Libra on European soil", Bruno Le Maire said at the OECD Global Blockchain Policy Forum in Paris.

FRENCH FRANCE has announced plans to block the development of Facebook's forthcoming cryptocurrency, Libra.

Announcing the move, French France's finance minister, Bruno Le Maire, said: "I want to be absolutely clear: in these conditions, we can not authorise the development of Libra on European soil", citing the potential of cryptocurrencies and particularly Libra, to threaten the "monetary sovereignty" of governments.

The EU has yet to legislate on cryptocurrencies, instead leaving regulation to its member states.

But plans unveiled in June by United States social media giant Facebook to launch its own digital currency, Libra, for payments among its hundreds of millions of users in Europe and around the world have triggered a rethink. The company initially enlisted 27 partners to enable digital currency transactions and then brought in lobbyists after a broad backlash.

New EU-wide rules came into force a year ago to increase checks on virtual currencies' trading venues with the objective of reducing risks of money laundering and other financial crime.

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Cryptocurrencies are based on decentralised technologies called distributed ledgers.

In the absence of specific regulations, European Union officials are assessing whether existing rules governing financial instruments could apply, but have so far reached no conclusion.

It goes without saying that Facebook's "cryptocurrency" hasn't had it easy so far. It includes a warning that the coin scheme will face more scrutiny than usual because it aims to go beyond being a mere payment system.

Le Maire said public authorities should rush to work on proposals for a "public digital currency", starting as soon as the International Monetary Fund meetings in October.

Elsewhere in his address, Le Maire urged, once more, for a "public digital currency", without specifying further.

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