· ·

Facebook’s Libra sparks concerns among European financial institutions

Facebook’s Libra sparks concerns among European financial institutions

Following Facebook’s unveiling of its stable cryptocurrency, not only did top crypto influencers criticize the plan, but some European officials immediately called for deep scrutiny of the project, as reported by Bloomberg.

It must not become a “sovereign currency”

Facebook finally revealed its highly anticipated cryptocurrency, “Libra.” With Libra, the social network giant aims to bank the unbanked and power transactions between individuals across the globe. The token will be a sign of “freedom, justice, and money,” which, according to David Marcus, is exactly what Facebook is trying to achieve.

Despite its mission to provide financial services everywhere, the announcement raised concerns among European officials who believe consumers’ privacy will not be protected.

“This instrument for transactions will allow Facebook to collect millions and millions of data, which strengthens my conviction that there is a need to regulate the digital giants,” stated French Finance Minister Bruno Le Maire in an interview on Europe 1 radio.

The Frech Finance Minister is concerned that the new cryptocurrency will be used as a money laundering scheme to help finance terrorism. Le Maire said he asked the Group of Seven (G7) central banks to write a report on Facebook’s project by mid-July in anticipation of their meeting.

“It is out of the question [that Libra will] become a sovereign currency. It cannot and it must not happen,” added Le Maire.

Facebook’s 2 billion user base, which represents more people than the most populous country in the world—China, poses an existential threat to monetary institutions and governments across the globe. As Markus Ferber, a German parliamentarian put it, Facebook could become an unregulated “shadow bank,” reported Bloomberg.

Along the same lines, Mark Carney, the Bank of England Governor, expressed that “anything that works in this world will become instantly systemic and will have to be subject to the highest standards of regulation.”

A combination of Facebook’s user base with its ability to leverage WhatsApp, Messenger, and Instagram could set the stage for Libra to become widely adopted in the short-term, but unlike Bitcoin, its success will depend on the regulatory demands that some of the world’s most powerful nations will impose on it.

Posted In: , , Regulation, Stablecoins, Technology
Invest with AMFEIX

Like what you see? Get more Libra news in your inbox

Subscribe to CryptoSlate, our daily newsletter containing the top stories and analysis.

Sign up to stay informed
Ali Martinez

Ali Martinez

Technical Analyst @ CryptoSlate

After Ali began forex trading in 2012 In 2014, he came across Bitcoin’s whitepaper and was so fascinated by the idea of a decentralized, borderless, and censorship-resistant currency that he started buying Bitcoin. By 2015, he started traveling to spread the word about Bitcoin.

View author profile

Disclaimer: Our writers' opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.