It is a well-known fact Facebook’s Libra is a rather controversial project. This new digital currency is met with a fair bit of scrutiny and even hostility. Although US regulators have yet to approve this project in an official capacity, French officials have confirmed Libra will not gain traction in their country. In fact, it is safe to say this currency is banned in France before it even launches.
French Officials Refute the Libra
There are many possible reasons as to why local regulators would oppose a concept as intrusive as Facebook’s Libra. Not only does it represent a new form of money which is not officially regulated in France, but the company behind it also doesn’t have a good reputation. Most people take offense to Facebook due to privacy concerns, and it remains to be seen if having them launching a financial product would do much to improve upon that aspect.
Keeping that in mind, it is only normal Brune Le Maire confirmed the Libra will not be welcome in France. It creates a significant threat to the domestic economy, which is something government officials aim to avoid at all costs. A similar stance has been taken on Bitcoin and other cryptocurrencies, which aren’t overly welcome in France either. While Bitcoin is not banned in an official capacity, it would appear the Libra could certainly fall into the “banned’ category.
A Europe-wide Blanket ban?
In the same speech, Le Maire alluded to the fact the Libra might not gain any traction in Europe as a whole. It is certainly true very few regions are warming up to the idea of Facebook issuing its own digital currency. Given the current circumstances, there is nothing to warrant any traction in Europe as far as the Libra is concerned. An attack against the monetary sovereignty of any European country will not be tolerated.
Although the Libra is supposed to be “for the public”, there are some genuine doubts regarding that aspect. A public currency issued by a technology company can never operate on the same level as central bank-issued fiat currency, according to Le Maire. He does seem to be a fan of issuing virtual representations of existing currencies, rather than create something new out of the blue. How those particular plans will unfold exactly, has yet to be determined at this stage.
Stability Isn’t a Guarantee for Approval
One could easily argue Facebook’s Libra is different from cryptocurrencies such as Bitcoin. Libra is issued by a centralized technology company which seeks to issue and control the currency. Additionally, Facebook’s project would maintain a stable value as it is linked to a basket of different currencies. While that stability is one of its selling points, it also creates a major hurdle among regulators, by the look of things.
Furthermore, one has to consider Facebook’s currency can easily fail. There is no guarantee of it succeeding either in the short or long term. If that project were to collapse entirely, it could effectively affect the basket of currencies all Libra in circulation are linked to. That is a genuine threat to monetary sovereignty of any currency in the reserve basket. So far, it seems the Euro will be included in that basket, albeit that situation may come to change if Europe maintains a blanket ban on Facebook’s Libra.
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