Facebook’s Libra cryptocurrency project has had a rollercoaster ride since it was announced earlier this year. It arrived with high hopes and big promises for a new digital financial system; the only problem is that Facebook would be at the helm.
Immediately, the ire of the world’s regulators were caught as the hackles went up first in the US Senate where Libra was forced to answer some tough questions, and face some harsh facts. The G7 central bankers have expressed their views – mostly negative; India has said it wouldn’t fly with them; China is racing to get its own competitor coin out ahead of the social media company.
It’s tough times for Facebook with the company letting investors know there is a chance it may not even launch if it does not get the global regulatory clearance it craves. Even this week, it was handed another major blow as French Finance Minister Bruno Le Maire said that the country could not permit the launch of Facebook’s proposed cryptocurrency in Europe because the “monetary sovereignty of states is at stake.”
This is another major blow for Facebook that keeps finding regulatory fires in its way. Additionally, the concerns being put up by these bankers and regulators are sincere and valid.
“All these concerns around Libra are serious. So I want to say this with a lot of clarity: I want to be absolutely clear: in these conditions, we cannot authorize the development of Libra on European soil,” Le Maire said sternly.
This is further problematic for Libra as the association underpinning the project is registered in Switzerland. So, while this is happening on the European stage, the company has been seeking a Swiss Payments License to try and make a few steps forward in its progression.
Yet, every time they do look like they are starting to move again, these fires crop up. The fires are also getting bigger, and more unbearable, for Facebook as Le Marie has changed his tone a bit – for the worse.
In June, Le Maire said he would ask for guarantees from Facebook that Libra would not be exploitable for illicit activities such as terrorism financing; clearly not satisfied with the response, he has closed up shop.
All the while, the US lawmakers continue to express their concerns relating to allowing a large tech company to create a privately controlled, alternative global currency.