This Thursday, France declared its plans to block Facebook’s Libra cryptocurency when it is launched in early 2020. The basis of banning the cryptocurrnency in Europe would be the threat to the sovereignty of governments’ monetary systems.
At the opening of an OECD conference on virtual cryptocurrencies, the Minister of Economy and Finance France, Bruno Le Maire stated:
“I want to be absolutely clear: in these conditions, we cannot authorize the development of Libra on European soil.”
The announcement of Facebook’s plans to launch a cryptocurrency came by in June. It was met with speculation from world governments and the masses alike. Facebook has been once and again been involved in leaked databases containing personal information of its users along with its role in the misinformation that exists in our daily lives today. Critics argue that leaving currency in such hands would be too big a risk.
Although the cryptocurrency is to be backed by a basket of currency (unlike bitcoin) and is to be supported by Visa, MasterCard, PayPal, Lyft and Uber; it is still too risky. Even the guarantee of its non-decentralized system (it’ll be entrusted to a Swiss based non-profit organization) isn’t enough to dissolve the backlash with which it was met.
Le Maire went on to say: “The monetary sovereignty of countries is at stake” from a “possible privatization of money … by a sole actor with more than 2 billion users on the planet.”
French officials openly and incessantly emphasized on the problems Libra would create for the global financial system. Government’s efforts to stabilize the economy through the money market would be rendered useless if people turned to this cryptocurrency in times of national crises.
Facebook will be offering services to people without the traditional check and balance of the current financial institutions; people will not be filtered and not as accountable to legal systems. Libra would be hard to regulate. The services come at very low rates and but not a low cost.
Critics define the cost of Libra to be the threat of global financial breakdown, rampant money laundering and terrorism financing.