The announcement of Libra, Facebook’s new cryptocurrency, has run into immediate political opposition in Europe, according to a report by Bloomberg.
French Finance Minister Bruno Le Maire said Libra can’t be seen as a replacement for traditional currency.
“It is out of question’’ that it “become a sovereign currency,’’ La Maire said. “It can’t and it must not happen.”
Le Maire asked that the Group of Seven central bank governors, who watch over the world’s monetary system, to be ready with a report on Libra for an upcoming July meeting. Le Maire’s main worries about the cryptocurrency are its implications for crime, including money laundering and the financing of terrorism. He also has concerns about privacy.
A German member of the European Parliament, Markus Ferber, expressed similar concerns. He said that Facebook has the potential to become a shadow bank, and that fact alone should keep regulators’ eyes on what happens next.
Libra is being designed as a stablecoin, which means that it’s backed by currency and companies like Visa, PayPal and Uber, as opposed to bitcoin, which is more volatile and speculative. Libra is tied to a number of securities and government-backed currencies as well.
Facebook wants Libra to be a ubiquitous currency and has plans to create a digital wallet inside of its messenger and WhatsApp platforms to facilitate the transfer of money.
“This money will allow this company to assemble even more data, which only increases our determination to regulate the internet giants,” Le Maire said.
On Monday (June 17), Bitcoin crossed the $9,000 mark for the first time in over a year, buoyed by the Libra launch.
Bitcoin hit a high of $9,381.82, according to a price index kept by CoinDesk.
Bitcoin hasn’t been as high as $9,000 since May of 2018, and the cryptocurrency is now up 14 percent since January. On the latest look on Monday (June 17), it was at $9,157.59.