France and Germany Move to Block Facebook’s Libra
When Facebook first unveiled official plans for the cryptocurrency Libra, there was certainly excitement from some circles. Unfortunately regulators haven’t been quite as thrilled, with many jurisdictions sharing their concerns and questions. Now two European countries are taking things one step further, announcing that they’ll move to block the digital asset altogether.
According to Reuters, both France and Germany have agreed to ban Libra. In a statement from the two countries they asserted that “no private entity can claim monetary power, which is inherent to the sovereignty of nations.” Furthermore Reuters reports that French Finance Minister Bruno Le Maire stated Libra should not be able to operate anywhere in the continent. A translation from CNBC quotes the Finance Minister as saying, “All these concerns around Libra are serious. So I want to say this with a lot of clarity: In these conditions, we cannot authorize the development of Libra on European soil.”
For their part, just as they’ve responded to criticism from other regulatory bodies, Facebook seems confident. In fact in a statement regarding Le Maire’s remarks Libra Association Head of Policy and Communications Dante Disparte said the criticisms “further underscore the importance of our ongoing work with regulatory bodies and leadership around the world.” Noting that the project was quickly becoming “the world’s most scrutinized FinTech effort,” Disparte went on to say, “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. The Libra Association and its members are committed to working with regulatory authorities to achieve a safe, transparent, and consumer-focused implementation of the Libra project. We recognize that blockchain is an emerging technology, and that policymakers must carefully consider how its applications fit into their financial system policies.”
As Disparte references, regulators in France and Germany aren’t the only ones asking questions. Here at home, members of the U.S. House of Representatives Committee on Financial Services wrote to Facebook leadership — including Calibra CEO David Marcus — asking them to reconsider their plans. Additionally, while testifying before Congress, United States Federal Reserve Chairman Jerome Powell also expressed his concerns about the project. All this has put the original slate of Libra partners in an awkward position, with reportedly few willing to speak up in their continued support for Libra at this time.
At this point, Libra and Facebook continue to say that they welcome the chance to explain their plans and assuage fears. However it’s unclear exactly when they’ll get that opportunity. Additionally, although a firm target launch date was never announced, it’s looking increasingly likely that Libra will have to wait out its proposed 2020 debut. Whether expectedly or unexpectedly, it seems that Libra’s fight has grown into a larger discussion about cryptocurrencies. That might be bad news for Libra going in but if the asset is eventually successful it could ultimately be a breakthrough for the space overall.