Facebook Inc.\u2019s ambitious plan to roll out its own cryptocurrency ran into immediate political opposition in Europe, with calls for tighter regulation of the social-media giant.<\/p>\n
French Finance Minister Bruno Le Maire said the digital currency known as Libra shouldn\u2019t be seen as a replacement for traditional currencies.<\/p>\n
\u201cIt is out of question\u2019\u2019 that Libra \u201cbecome a sovereign currency,\u2019\u2019 Le Maire said in an interview on Europe 1 radio. \u201cIt can\u2019t and it must not happen.\u201d<\/p>\n
Read more about Facebook\u2019s cryptocurrency plan<\/p>\n
Le Maire called on the Group of Seven central bank governors, guardians of the global monetary system, to prepare a report on Facebook\u2019s project for their July meeting. His concerns include privacy, money laundering and terrorism finance.<\/p>\n
Libra was also a talking point at the European Central Bank\u2019s annual symposium in Sintra, Portugal, where Bank of England Governor Mark Carney referenced Libra. “Anything that works in this world will become instantly systemic and will have to be subject to the highest standards off regulation,” he said.
\nCarney\u2019s \u2018Open Mind\u2019<\/p>\n
While Carney said “we need to have an open mind” about technology that can facilitate cross-border money transfers, “we will look at it very closely and in a coordinated fashion” at multilateral organizations including the G-7, the International Monetary Fund, Bank for International Settlements and Financial Stability Board.<\/p>\n
Meanwhile, Markus Ferber, a German member of the European Parliament, said Facebook, with more than 2 billion users, could become a \u201cshadow bank\u201d and that regulators should be on high alert.<\/p>\n
Facebook is developing Libra, a stablecoin designed to avoid the volatility of Bitcoin and thus be useful for commerce, in partnership with some of the biggest names in payments and technology, such as Visa Inc. and Uber Technologies Inc. The new currency, which will launch as soon as next year, is pegged to a basket of government-backed currencies and securities.<\/p>\n
While Bitcoin, the original cryptocurrency, has attracted a lot of attention since its creation a decade ago, it\u2019s still not widely used beyond market speculation. Facebook meanwhile, plans to build a new digital wallet that will exist in its Messenger and WhatsApp services to make it easy for people to send money to friends, family and businesses through the apps.<\/p>\n
“This money will allow this company to assemble even more data, which only increases our determination to regulate the internet giants,\u201d Le Maire said in parliament.<\/p>\n