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Facebook’s Libra Faces Scrutiny From European Authorities

Facebook’s Libra Faces Scrutiny From European Authorities (1)

The launch of Facebook’s Libra cryptocurrency has been generally met with a tsunami of excitement and hullabaloo, but there have also been some voices of concern opposing the idea.

In particular, the launch was met with an immediate political opposition in Europe, led by French Finance Minister Bruno Le Maire and a German member of the European Parliament Markus Ferber. According to Bloomberg, the politicians called for greater regulatory scrutiny of the blockchain project, and expressed concerns about the social media platform using its 2 billion user base to become a “shadow bank”.

Ferber said, “Multinational corporations such as Facebook must not be allowed to operate in a regulatory nirvana when introducing virtual currencies,” and asked regulatory bodies to take a closer look.

Le Maire voiced similar concerns during an interview with Radio 1 and called upon the governors of the “Group of Seven” central banks to analyze and prepare a report on Facebook’s cryptocurrency project for their next meeting in July.

The primary concern is how Libra may grow to overpower and replace traditional currencies, with Italian Prime Minister Matteo Salvini also commenting on a similar problem with mini-BOT, a proposed national currency that is predicted to shake the financial infrastructure of the European Union.

“It is out of the question” that Libra “become a sovereign currency… It can’t and it must not happen,” Le Maire said.

Libra was announced last Tuesday by Facebook, being pitched as a way to “build a financial ecosystem that can plug in and empower billions of people” following the rumour mill on overdrive for several months. Libra is aimed to be a stable coin, meaning it will not have the volatility of cryptocurrencies and will thus be more applicable for day-to-day usage.

Facebook has some of the most prominent financial institutes onboard including the likes of Visa, Uber, and Coinbase, and has revealed plans of a formal launch in 2020. A Facebook subsidiary, Calibra, is also working on a digital wallet that will operate inside Facebook Messenger and WhatsApp services and will allow the users to conduct transactions to friends, family, and businesses using the apps.

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