France to Block Development of Libra?
French Minister of Finance Bruno LeMaire warned that the launch of Libra would threaten the monetary sovereignty of governments.
French Minister of Finance Bruno LeMaire warned that France may block the development of Libra in the country, reported AFP. The minister said Libra would threaten the “monetary sovereignty” of governments.
“I want to be absolutely clear: in these conditions, we cannot authorize the development of Libra on European soil,” Le Maire said during an OECD conference on virtual currencies.
France is not entirely free to define its monetary policy, as it is a part of the Eurozone. The only way France can alter the course of the monetary policy is through its influence within the ECB, through the Governing Council of the central bank.
France is the next country to speak directly of the threats that Libra poses. In the past months, India clearly stated it would ban the Calibra wallet from its territory, to avoid the usage of Libra for grey economy transactions.
The US has taken a hawkish stance on Libra, and Facebook is now busy explaining its project to US regulators. The chief concern of the US is that Libra may be used in terrorist financing.
With more than 2 billion estimated users, in theory, Libra may be large enough to mop up significant finds in fiat. However, it would have to grow even more to challenge the economy of France, which has a size of more than 3 trillion euro.
Moreover, general anti-money-laundering regulations cap the sums that can be moved through fintech tools to about 2,500 euro. Even with full KYC, Facebook’s Libra would still be small enough not to be noticed initially.
Currently, Switzerland is also unleashing its regulatory scrutiny, dealing especially with the Libra Association. The governing body, which will also carry the Libra technology as block producers, is registered in Switzerland and will have to answer to local financial regulators. The local financial regulations agency, FINMA, stated that Facebook will have to comply with bank-like requirements for liquidity and security, above and beyond those of fintech firms.
Additionally, a European Commission probe has been opened against Facebook.