Europeans want to ban libra, Facebook's digital currency

The World with AFP Posted today at 06h04

Time to Reading 3 min.

Every day, the libra undergoes the wrath of its fiercest opponents, the States. The G7, the group of the seven most industrialized countries (Germany, Canada, United States, France, Britain, Italy and Japan), had already agreed Thursday in Washington that the prerequisite for launching cryptocurrencies stable, like libra, was the establishment of a legal framework. An additional milestone was reached Friday (October 18th) when Bruno Le Maire, the French Minister of the Economy, announced that France, Italy and Germany were preparing a series of measures to ban the future cryptocurrency of Facebook in Europe , whose launch is scheduled for 2020.

"In the coming weeks, with Olaf Scholz and Roberto Gualtieri, my German and Italian counterparts, we will take a number of initiatives to make it clear that libra is not welcome in Europe because it is our sovereignty. who is at stake », he said at a press conference on the sidelines of the IMF and World Bank meetings in Washington.

"We will not accept that a private multinational company has (…) the same monetary power as sovereign states that are subject to democratic control; because the big difference between Facebook and the States is that we are subject to democratic control, that is, to the control of the people ", he added.

For their part, the G20 finance ministers have called for Friday"Assess" the risks posed by stable digital currencies, ie backed by a basket of currencies such as the euro or the dollar, and " remedy " before they are launched.

"Preserving the autonomy of democratic states"

Citing in particular money laundering, illicit financing or the weakening of consumer and investor protection, the Japanese G20 presidency has also asked the IMF to examine the macroeconomic implications. "Including the issues of monetary sovereignty of the Member States taking into account the characteristics of the countries".

But Europeans seem to want to go further by simply banning Facebook's currency. Olaf Scholz has followed suit with his French counterpart: "I am in favor of not allowing the introduction of such a world currency, because it is the task of democratic states".

It also recognizes the need to reform the banking and financial services sector to make cross-border international payments simpler, faster and cheaper, "But at the same time, it is necessary to preserve the autonomy of democratic states"he continued.

For his part, Italian Finance Minister Roberto Gualtieri stressed: "There is a strong consensus of the international community not to allow the development of private currencies", falling "Too big a systemic risk" and that'"Instead, it was necessary to modernize" banking services.

Financial stability and integrity

"I repeat, our priority today is to work with regulators to answer their legitimate questions and give them all the necessary guarantees", reacted Bertrand Perez, the general director of the Libra Association, officially launched Monday in Geneva. "The Libra project was created to complement the existing system and not to replace sovereign currencies", further commented the Association in a statement.

Bruno Le Maire seemed to dismiss the idea of ​​working hand in hand with Facebook, raising a contentious issue: the fact that the Libra will be backed by a basket of currencies. "It will be enough if Facebook decides to have more euros or more dollars to have an impact on the exchange rate of the euro or the dollar and therefore a direct impact on the trade, the industry, the states that have as reference currency the euro or the dollar "he added, seeing it as a potential weakening of the independence of monetary policy.

"Do we want monetary policy to be in the hands of a private multinational like Facebook? My answer is clearly nohe concluded. However, he stressed that he was not against the establishment of a public digital currency, on which France is willing to work "In a European setting".

The IMF on Friday reiterated its position on stable virtual currencies: reap the benefits of innovation while minimizing risk. If these currencies offer the promise of including more people in payment systems, for now, "They have not yet been generally tested and pose significant risks, such as financial stability and integrity, consumer protection and privacy"commented Agence France-Presse Tobias Adrian, Director of Capital Markets.