PARIS, Sept 14 (NNN-AGENCIES) — France and Germany have agreed to block Facebook’s Libra cryptocurrency, the French finance ministry said on Friday.
In a joint statement, the two governments affirmed that “no private entity can claim monetary power, which is inherent to the sovereignty of nations”.
French Finance Minister Bruno Le Maire said on Thursday that Facebook’s new cryptocurrency should not be allowed to operate in Europe while concerns persist about sovereignty and persistent financial risks.
France says it will block development of Facebook’s Libra digital currency in Europe because it threatens the “monetary sovereignty” of governments.
Finance Minister Bruno Le Maire said Libra posed financial risks and could be open to abuse.
However, he did not spell out how France could keep Libra out of the 28-member European Union.
The social media giant, which has the backing of payments firms Visa and Mastercard and taxi apps Lyft and Uber, announced plans for a currency in July, but the project has faced hostility and scepticism.
In another setback for Libra, this week Switzerland said the proposed payments system could face strict rules that typically apply to banks, on top of tough anti-money laundering laws.
The European Commission has responded to Le Maire’s announcement, saying it would look at all aspects of Libra to understand issues ranging from tax concerns to worries over data privacy.
Asked about France’s stance, Vanessa Mock, a spokeswoman for the commission, said: “It’s likely that once we know more [about] the contours of the currency, the project will require some form of authorisation in Europe.”
“Then it would be up to the Libra association to contact relevant authorities – be they national or at EU level – to obtain the necessary licenses, if needed, before launching in the EU.”
The Group of Seven advanced economies warned in July that it would not let Libra proceed until all regulatory concerns had been addressed, saying that a prolonged discussion over the project might first be required.
The US Congress is looking into Libra’s potential impact, while central bank chiefs, including the UK’s Mark Carney, have voiced scepticism. US President Donald Trump has tweeted he is “not a fan” of the currency.
