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France puts a stop to Libra, Facebook's virtual currency project

2019-09-12T11:11:29.872Z

France puts a stop to Libra, Facebook's virtual currency project


Paris (AFP)

France on Thursday put the wheels in the wheel in Facebook's cryptocurrency project by announcing that it would not allow the development of Libra "on European soil", believing that state sovereignty was at stake.

The French Finance Minister, Bruno Le Maire, has announced it bluntly to the OECD: "In these circumstances, we can not authorize the development of the Libra on European soil", he said during the meeting. a conference devoted precisely to the challenges of cryptocurrencies.

In charge of opening the debate, the minister has made a very harsh indictment against the cryptocurrency that Facebook plans to launch in 2020, going further than in his previous interventions where he had already expressed his concern about the Libra.

Considering that "the monetary sovereignty of States was at stake", he did not hesitate to describe as "systemic" the risks that could result from this "possible privatization of a currency (...) held by a single actor who has more than 2 billion users on the planet ".

"Any failure in the functioning of this currency, in the management of its reserves, could create considerable financial disorders," said the Mayor, also fearing that the Libra is replacing the national currency in the States where the currency is weak or has a strong devaluation.

The minister, who had already publicly expressed his doubts about Facebook's virtual currency project at the Chantilly G7 Finance in July, also expressed fears that the Libra will escape state control over the financing of terrorism.

"I do not see why we have been paying so much attention for years to avoiding 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. he said.

- "strong" states and "powerful" technologies -

In the same tone, the minister refused that cryptocurrencies could develop without any regulation.

"I do not see why the new technologies would necessarily be guided by a libertarian ideology that refuses any regulation and contests any role to the state," he said. "I think, on the contrary, that we can have strong states and powerful new technologies".

In his speech, Mr. Le Maire took care to make the difference between Libra and cryptommonaies, saying elsewhere "passionate" by the subject and recalling that France is thinking about the creation of a public digital currency issued by the central banks.

"I believe in blockchain," he said. "This is a technology of the future, a major technology of the 21st century that must be taken seriously, organized and ensure that OECD member states are at the forefront of mastering this technology" , he explained.

He has also asked the Organization for Economic Co-operation and Development (OECD), which is currently working on the taxation of digital giants, to seize also the question of the taxation of cryptocurrencies.

"I hope that the OECD will in turn start reflections on the approximation of taxation models of transactions on cryptoactives," said Le Mayor. "It is necessary that the tax models are the same, so that we have regulatory arbitrage strategies that are the same across the planet," he added.

With the announced creation in mid-June of a digital currency offering an alternative payment method to traditional banking channels, Facebook wants to upset the global financial system. Inspired by cryptoactives like bitcoin, it must be run by a non-profit consortium.

The project nevertheless raises serious concerns from central bankers, politicians and regulatory authorities, particularly with regard to risks to financial stability.

In July, the G7 finance ministers warned about the risks to the international financial system of cryptocurrency projects.

© 2019 AFP

Source: france24

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