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France is leading a coalition of the top five economies of Europe that aims to make the launch of Facebook crypto project Libra in the region unsuccessful.
Government representatives from France, Germany, Italy, Spain and the Netherlands have been gathering in backroom meetings to discuss the prospect of blocking Facebook’s launch of Libra in European markets. When asked to comment, spokeswoman of the French Finance Minister, Bruno Le Maire, referred to the minister’s earlier comments that he made during the G7 meeting, “Countries would lose their sovereignty to private interests and lose control over their monetary policies.”
The Eurozone has been central to the Libra debate. A month ago, the French Finance Minister said that Facebook’s Libra should be banned. Similarly, Germany’s Finance Minister, Olaf Scholz, has been “very, very critical” of Libra, according to a German government’s spokesperson.
France and Germany have also issued a joint statement last month which said that Facebook’s plan for Libra failed to convince them. The anonymous nature of transactions related to the digital currency mean that tracing money launderers and terror financing will be next to impossible. The joint statement remarked, “We believe that no private entity can claim monetary power, which is inherent to the sovereignty of nations.”
Recently, both nations have been encouraging central banks of European countries to accelerate work on issues around possible public digital currency solutions. According to a recent IBM’s report, it is highly like that one of the emerging economies will launch its own Central Bank Digital Currency. Apparently, European Central Bank has been quietly working on its own digital currency project.
It seems that Eurozone countries are focused on blocking any private issuers of digital currency. But the obvious problem for policy makers is to come up with legal reasons to override the prospects of operationalizing a private payment service, such as Libra. The next phase of the conversation will surround using legal grounds to undermine Libra.
Hard Road for Facebook’s Cryptocurrency Project
This has been a tough year for Facebook. Policy-makers in United States have also grilled numerous Facebook officials over their intent to launch Libra. Facebook’s CEO, Mark Zuckerberg, was called before Congress to defend his company’s plan to launch a digital currency on a platform that connects nearly two and a half billion (!) people.
Facebook plans to launch its digital currency next year. However, harsh criticism from regulators have hampered their plans and a number of partners of the initiative, including MasterCard and Visa, have left the group. Governments from Europe and the U.S. have been unstinting in their criticism of the forthcoming cryptocurrency. It remains to be seen how Facebook rebounds from the failures of this year.