Major European players are joining forces to block Facebook’s proposed digital currency because of the dangers it poses to national sovereignty, French Economy Minister Bruno Le Maire announced Friday,
The firm opposition from France, Italy and Germany added to the mounting resistance faced by the tech giant’s troubled foray into digital finance.
The Group of 20 economies also warned Friday of “serious” risks of money laundering, fraud and illicit finance posed by Libra, the social media network’s digital currency.
Italy, Germany and France will take unspecified steps in the coming weeks “to show clearly that Libra is unwelcome in Europe because our sovereignty is at stake,” Le Maire told reporters on the sidelines of the annual meetings of the World Bank and International Monetary Fund in Washington.
“We will not allow a private company to have the same power, the same monetary power as sovereign states,” he added.
“The major difference between Facebook and governments is that we are subject to democratic control, that is the control of the people.”
The Group of Seven economies on Thursday had said any reserve-backed digital currency like Libra — known as a stablecoin — would require a sound legal framework before entering circulation.
But European officials say they want to go even further by blocking the currency outright.
Like Le Maire, German Finance Minister Olaf Scholz also said Friday he was “very skeptical” about Libra.
“I favor not allowing the establishment of such a global currency because that is the responsibility of democratic states,” he said.
But Scholz said he recognized the need for banking reforms to make cross-border payments more simple, cheap and speedy.
“At the same time, we must protect the autonomy of democratic states,” he said.
Libra also has faced challenges from within after major financial and commercial players in recent weeks have backed out of the project, including Visa, Mastercard, eBay, Stripe, PayPal and the online travel firm Bookings Holdings.
But the Libra Association has tried to ward off a blockade by saying it will address the concerns posed by government officials.
“I repeat our priority today is to work with regulators to answer their legitimate questions and provide all necessary assurances,” said Bertrand Perez, managing director of the association.
AFP
