Updated with comments from the Libra Association.
France has vowed to block development of Facebook’s planned cryptocurrency, Libra, on the grounds that it threatens “monetary sovereignty.”
French Economy and Finance Minister Bruno Le Maire, speaking at an OECD conference on cryptocurrencies, said: "I want to be absolutely clear: In these conditions, we cannot authorize the development of Libra on European soil."
Facebook has billed the planned digital currency as a cheap alternative to cash and expensive remittance payments. Along with 27 large companies from tech and finance, the company plans to issue the “Libra” currency to its some two billion users from a Swiss bank account some time next year, but has already attracted ire from regulators.
Soon after its launch in June, for instance, US representative Maxine Waters demanded Libra be put on ice indefinitely. Lawmakers on both sides of American politics, meanwhile, were broadly unimpressed by the performance of Libra overseer David Marcus before senate and house hearings throughout July.
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Like Le Maire, many US lawmakers described the proposed currency—and its implicit plans to eventually compete with the dollar—as an affront to nation state economic sovereignty.
In Europe, German MEP Markus Ferber warned that Libra could wind up as a “shadow bank” operated by actors removed from the sovereign banking systems. The Bank of England’s Mark Carney, meanwhile, promised tough regulation while calling to keep an “open mind.”
At the OECD conference today, Le Maire said Libra reportedly threatened to draw people away from ailing national currencies. He also reportedly emphasized Facebook’s unaccountability, describing Libra as the "possible privatisation of money ... by a sole actor with more than 2 billion users on the planet.”
According to Reuters, Le Maire also intimated that he had been in touch with the European Central Bank, with a view to setting up a sovereign-backed “public digital currency.”
In addition to concerns around shadow banking and monetary sovereignty, there have also been questions around user privacy, spurred on by Marcus’s promise before Congress that services built atop Libra’s proprietary and as-yet-unfinished “blockchain” would be compelled to provide users’ financial data to law enforcement if asked.
In an interview with Decrypt upon launch, Marcus laid these conflicts bare, admitting that Libra’s ultimate goal to be “permissionless”—that is, open to everyone—was difficult to square with its commitment to being fully compliant.
Commenting on the most recent development, Libra communications chief Dante Disparte told Decrypt, "In the nearly three months since the intent to launch the Libra project was announced, we have become the world's most scrutinized fintech effort." He added: "We welcome this scrutiny and have deliberately designed a long launch runway to have these conversations, educate stakeholders and incorporate their feedback in our design."
Disparte also acknowledged that the stakes were high, saying, "the comments today from France's economy and finance minister further underscore the importance of our ongoing work with regulatory bodies and leadership around the world...the Libra Association and its members are committed to working with regulatory authorities to achieve a safe, transparent, and consumer-focused implementation of the Libra project. We recognize that blockchain is an emerging technology, and that policymakers must carefully consider how its applications fit into their financial system policies."