French Finance Minister Bruno Le Maire announced on Thursday that France would refusing to allow the “European-based” development of Libra, the cryptocurrency Facebook wants to launch in 2020, saying that “our monetary sovereignty is at stake.”
“I want to be absolutely clear: in these conditions, we cannot authorise the development of Libra on European soil,” said the minister at the opening of an OECD conference on the challenges of Europe.
“Any failure in the operation of this currency, in the management of its reserves could create considerable financial disorders,” said Le Maire, adding that Libra could replace the national currency in states where the currency is weak or experiencing a sharp devaluation.
Talking about the Libra project at a meeting of the Organization for Economic Co-operation and Development in Paris, Le Maire said: “This eventual privatization of money contains risks of abuse of dominant position, risks to sovereignty, and risks for consumers and for companies.
The minister, who had already publicly expressed his doubts about Facebook’s virtual currency project at the Chantilly G7 Finance in July, also expressed fears that the Libra could be used to finance terrorism.
“I do not see why we have been paying so much attention for years to avoiding any use of money for money laundering and the fight against the financing of terrorism and that a digital currency like Libra would escape these obligations,” he said.
Inspired by crypto-currencies like bitcoin, Facebook wants to upset the global financial system by introducing a digital currency that offers an alternative payment method to traditional banking channels.
The project nevertheless raises serious concerns from central bankers, politicians and regulatory authorities, particularly with regard to risks to financial stability.
Officials from 26 central banks, including the US Federal Reserve and the Bank of England, will meet with representatives of Libra in Basel on Monday.
Libra’s founders have been asked to answer key questions about the currency’s scope and design.