Facebook faced with scrutiny last year when the social media network was accused of selling private data. Now that they attempt to launch a global cryptocurrency project, Facebook is under heavy regulatory pressure from both governments and banks. Dissuading the company from releasing a potentially international global payment alternative, numerous countries held meetings with the
Facebook faced with scrutiny last year when the social media network was accused of selling private data. Now that they attempt to launch a global cryptocurrency project, Facebook is under heavy regulatory pressure from both governments and banks.
Dissuading the company from releasing a potentially international global payment alternative, numerous countries held meetings with the Libra Association to discuss regulatory requirements.
With countries such as the U.S., France, Germany, and China recently releasing official statements about Libra, what is their view on the cryptocurrency’s eventual launch?
As one of the largest and most influential nations in the European Union, France has recently issued official statements pertaining to Facebook’s project. The French Minister of Finance has recently stated that Libra presents a threat to Europe’s monetary sovereignty.
The Minister said that France will not allow the introduction of Libra on European soil, stating that ‘in these conditions, we cannot authorize the development of Libra in Europe.’
Ever since the official announcement of Libra, Le Maire became one of the most significant critics, expressing his view that Facebook is not capable of protecting its users and data, and should thus not be allowed to issue a cryptocurrency.
On Tuesday, the German Minister of Finance Olaf Scholz announced that policymakers should not accept the introduction of cryptocurrencies such as Libra and that Germany would reject Libra and similar projects.
Germany recently published a blockchain strategy that could partially digitally transform the economy, but prevent it from being disrupted by other solutions. The document states that Germany’s federal government will collaborate with both European and International entities to protect traditional fiat currencies from stablecoins, who could potentially replace them.
Additionally, the German government plans on issuing a legislation by the end of the year, that will allow the establishment of blockchain-based electronic bonds.
The global economic superpower holds an aggressive stance towards the launch of Libra, fearing that the dollar may be replaced by an alternative digital asset. The U.S. was one of the most vocal opponents of Libra, going as far as to request a cease of the cryptocurrency’s development so that policymakers and regulators can establish whether Libra may even launch.
Congresswoman Maxine Waters was one of the most influential American individuals that openly opposed Libra. As the head of the house committee on financial services, Waters stated that a quarter of the world already has access to Facebook. Because of this, Facebook should stop developing Libra at the moment so that the Congress and regulators may asses the potential risks that Libra would introduce. If such a decision would not be made on time, it would be already too late and Libra would be ‘too big to fail.’
While the US completely opposes the stablecoins’ launch, the second global economic power is already working on introducing their own Libra-like project. As all of the previously mentioned countries, China opposes Facebook’s project as well. However, the Asian nation is developing its own bank-issued cryptocurrency that would challenge the eventual threat of digital assets such as Libra.
Developed by the Central bank since 2014, the People’s Bank of China is keen on releasing a national digital asset that would protect China’s monetary sovereignty. Fearing that Libra would lead to the US dollar being even more powerful, the Chinese government is against the introduction of the project.
The director of the PBoC Wang Xin recently stated that Libra would have too much of an influence on financial stability, monetary policy, and the international monetary system if the digital asset were to be adopted as a solution for cross-border payments.