Libra Under Attack: France To Block Development 'On European Soil'

France Thursday dealt a blow to Facebook’s hopes for its Libra cryptocurrency as French Finance Minister Bruno Le Maire vowed to block its implementation, saying it presents “risks to sovereignty.”

“This eventual privatization of money contains risks of abuse of dominant position, risks to sovereignty, and risks for consumers and for companies,” Le Maire said at a meeting of the Organization for Economic Co-operation and Development in Paris, stopping short of what steps to take to block the instrument.

Le Maire told the OECD Blockchain Policy Forum Europe Libra must not go forward. He instead favors a public digital currency issued by central banks to “guarantee the total security of transactions.”

“I want to be absolutely clear: in these conditions, we cannot authorize the development of Libra on European soil,” Le Maire said.

Le Maire cited Facebook’s size as the problem.

“Libra also represents a systemic risk from the moment when you have 2 billion users. Any breakdown in the functioning of this currency, in the management of its reserves, could create considerable financial disruption,” Le Maire said.

He noted cryptocurrencies undermine the fight against terrorism financing. The Group of Seven said in July it would not allow the Libra to proceed until all regulatory concerns had been addressed. Earlier this week, Switzerland said it would subject the Libra not only to money-laundering rules but also to banking regulations.

“I do not see why we have been paying so much attention for years to avoid any use of money for money laundering and the fight against the financing of terrorism and that a digital currency like Libra would escape these obligations,” he said.

Facebook unveiled the currency in June as a means of bringing cryptocurrency to the masses. The social media giant partnered with 27 other organizations, including Visa, PayPal and Uber, and planned to launch Libra in 2020. Le Maire voiced his opposition from the getgo.

In a statement, Dante Disparte, head of policy and communications for the Libra Association, said the group welcomes scrutiny and pledged to work with regulators.

Cryptocurrency is a digital payment system that uses encryption techniques to regulate the generation of units and verify transactions independent of central banks. Unlike other cryptocurrencies like Bitcoin, the values of which fluctuate wildly, Libra’s value would be relatively stable, pegged to a basket of global currencies and other investments and would not be open to mining as is Bitcoin.