Why is the Finance Minister of France Concerned About Facebook’s Libra?

By Prashant Jha

In the midst of all the hype that has surrounded Facebook’s crypto project Libra of late, some people have begun to voice their concerns about the project itself. One of them is Bruno Le Maire, currently the Finance Minister of France. Speaking on the French Radio, he has recently stated that this particular currency cannot possibly function as a standalone sovereign currency.

Libra has just unveiled its white paper and explained its project in the following terms:

“Now is the time to create a new kind of digital currency built on the foundation of blockchain technology. The mission for Libra is a simple global currency and financial infrastructure that empowers billions of people.”

Now, even this goal is seemingly triggering some economic concerns, particularly relevant to the issues on regulation and the status to be attributed to this particular currency. Speaking in these counts, Le Maire issued a strict warning to all crypto enthusiasts and probable users of Libra, urging them to be careful about its use.

Considering that the social media giant Facebook has a massive user base of more than 2.3 million people, the spread of its native crypto project could easily pose a credible threat to the role of banks in the existing commercial system as well as the role played by the governments in the banking, financial and monetary systems.

Owing to these issues, Le Maire has warned everyone in the following terms:

“That Facebook creates its own currency, a transaction instrument, why not. In contrast, it is out of the question that it becomes a sovereign currency.”

He has even urged the social media giant to guarantee that “this instrument of transaction cannot be diverted to finance terrorism or any other illegal activity.”

The fact that the Minister is serious about his concerns was made clear by the following statement of his where he added:

“I asked the central bank governors of the G7 to report to us in mid-July, when the G7 Finance Ministers will be meeting, to tell us what guarantees are to be obtained from Facebook.”

Knowing Facebook, and its aversion to restrictive regulations, it seems highly unlikely that it would give in to Le Maire’s demands. Yet, it definitely constitutes an important comment, coming from the French Finance Minister himself, and possibly shaping the stances of other allied European governments in a similar fashion as well.