While it is not too uncommon to hear a regulator, central banker, or even government minister spill anti-Libra rhetoric, France’s recent change in tune has partly been explained. This week, France’s finance minister dropped a hammer blow for Libra’s development, but their reasoning could well be about competition.
Regardless of the hurdles that keep cropping up, Bertrand Perez, the director of the Libra Association, has given assurances – to a French publication – that the cryptocurrency should launch during the second half of 2020.
This despite French Finance Minister Bruno Le Maire who said just yesterday that they “cannot authorize the development of Libra on European soil.” The finance minister was adamant, although his tune was starkly different to a few months ago.
Le Marie began his position towards Libra by saying they would seek guarantees from Facebook that the cryptocurrency would not be exploitable for illicit activities such as terrorism financing. Clearly, not satisfied with the way things have gone, Le Maire has clamped down.
The minister has also let it be known that he believes Europe should consider “a public digital currency,” which could challenge Libra. He said he would discuss this issue with other ministers next month.
It is an interesting proposition from the European Union, but not one out of the realm of possibility. Currently, China is in the midst of launching their own central bank-backed cryptocurrency; more so, the Chinese have also let slip that they feel Libra is a competitor for such a launch.
The difference is, China, as well as the EU, would have a much smoother ride through the launch of a cryptocurrency as they would be able to suit it around the governing regulations. More so, it would most likely be launched via the central bank, one of the few entities allowed to create new currencies.
Despite all this, Facebook’s Libra association remains steadfast in their belief that they will be able to appease regulators and reach their second half of 2020 deadline for the launch of the coin.
Perez’s statement that Libra is still on track was followed him trying to quell the concern of these central bankers and governments that Facebook was not trying to launch a sovereign coin.
He told Les Echos:
“We don’t want to become a new BlackRock. That’s why these concerns about the destabilizing effect our reserve currency could have on central banks’ fiat currencies — which figure in our basket — seem unfounded to us.”
It seems odd that Facebook’s decision to try and launch a cryptocurrency may have started a monetary arms race. China is in the race, regardless of Facebook’s opinion, but if Europe also joins in, then there is not much stopping a true global procession of digital currencies.
Central banks have been mulling this over for a while now, but perhaps Libra, regardless if it launches or not, has become an inevitable catalyst for the global adoption of cryptocurrencies.