French finance minister: Libra should not be developed in EU | KOB 4
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French finance minister: Libra should not be developed in EU

October 09, 2019 08:20 AM

BRUSSELS (AP) - The European Union should not allow Facebook to develop its digital currency project, known as Libra, on "European territory" because it threatens the monetary sovereignty of member states, France's finance minister Bruno Le Maire said Wednesday.

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Speaking ahead of a meeting of the 19 eurozone finance ministers, Bruno Le Maire said alternative payment systems pose many dangers because they could also be used for money laundering or "terrorism funding."

"I'm absolutely not an enemy of Facebook, neither an enemy of Google or Amazon," Le Maire said. "I just want to recall some principles. If you want to have a sovereign currency, it's up to the states. And only to the states, to be responsible for a sovereign currency. It should not be the role of a private company to try to get a sovereign currency like a sovereign state."

Facebook has presented Libra as a currency that could be used for digital payments, particularly outside the U.S. It would be backed by real currency, unlike other digital currencies like Bitcoin or Ethereum.

But its project has been met with skepticism both in the U.S and Europe, as financial regulators and members of Congress questioned the company's motives for creating a new digital currency.

"We should not accept to have Libra being developed on the European territory," Le Maire said.

Separately, the Bank of England's Financial Policy Committee, which assesses financial risks, also warned that Libra will have to clear a series of hurdles if it's to be licensed in Britain.

Though it said Libra has "the potential to become a systemically important payment system," it stressed that "such a system would need to meet the highest standards of resilience and be subject to appropriate supervisory oversight, consistent with the principles set out above."

"The terms of engagement for innovations such as Libra must be adopted in advance of any launch," it added.

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Copyright 2019 The Associated Press. All rights reserved.

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