The French Finance Minister, Bruno Le Maire, warned on Thursday that the European Union (EU) will not authorise the crypto currency Facebook wants to launch because it calls into question the monetary sovereignty of states and involves numerous risks, including a systemic one, given the enormous dimension of this social network.
“This eventual privatization of a currency poses risks of abuse of dominant position, poses sovereignty risks, poses risks for consumers and companies, and poses a systemic risk, because Facebook has 2 billion users in the world”.
The French minister, who was participating in the first session of a forum on blockchain technology of the Organization for Economic Cooperation and Development (OECD), said that if the pound project materialized, the monetary sovereignty of states would be called into question. In his opinion, given the power of Facebook, this crypto currency would replace weak currencies of sovereign countries, which would “question the independence of States”.
In addition, Libra could escape the obligations imposed by state monetary authorities to combat money-laundering or the financing of terrorism. “I say this very clearly, under these conditions we cannot authorise the operation of Libra on European territory,” he stressed.
Le Maire recalled that the finance ministers of the Group of Seven most developed countries (G7) at the meeting he hosted last July in Chantilly, north of Paris, were “unanimously” concerned about the Facebook project. But he called for a reaction from the banking system. In his opinion, Facebook is taking advantage of the high cost and slowness of international financial transactions today.
That’s why he said he has asked banks to make proposals to improve the international payment system and reduce its cost. He also proposed to launch an international reflection on the creation of a “public digital currency”. He said he has discussed the issue with the President of the European Central Bank (ECB), Mario Draghi, and his successor, Christine Lagarde.
Le Maire wants ideas on a public digital currency to be exposed at the October meetings of the International Monetary Fund and the World Bank in Washington and for there to be “concrete projects” in a few months’ time, with the collaboration of the OECD.