Following series of reactions to the announcement of Facebook’s Libra cryptocurrency, most governments seem unsettled. The French seem to have taken it a step further after early comments made by French minister of Economy; who asked for ‘guarantees’ with regards to the privacy accusations against Facebook.
Just as in direct response, the G7 (Group of world’s 7 best economies) headed by France, has today set up a task force to examine how Facebook’s cryptocurrency can be regulated. Speaking on the matter, Francois Villeroy de Galhau, Governor of France’s central bank says:
We want to combine being open to innovation with firmness on regulation. This is in everyone’s interest.
France however says it’s not against Facebook creating a financial instrument; it only opposes the Libra becoming a sovereign currency.
The G7 task force is headed by Benoit Coeure, a board member of the European Central Bank; who is charged with studying Facebook’s coin proposal with a focus on consumer protection, operational resilience and AML requirements; which are major concerns expressed by the EU and G7.
Other Central Bank Governors from Britain and Germany have asked for scrutiny of the project; which they say could give Facebook enormous central control.
Bank of England Governor Mark Carney in an interview today says the backlash was expected; even though he was consulted prior to the announcement. In his words: “It has to be safe, or it’s not going to happen.”
Germany’s CBN Governor warned: “Facebook’s stablecoin could undermine banks, if they become a widespread alternative to bank deposits in conventional currencies.”
It is yet to be known, if these arguments are an expression of fear of domination by Facebook over banks? Or a genuine interest to protect users?