- Germany joins France in standing up against Libra
- Both countries cement their stance against the growth of a private digital currency
- This comes after several US regulators accused Libra for not following guidelines
France and Germany Say NO!
The European Unions’s two major financial powers — France and Germany — recently agreed to block Libra from operating in their respective countries. Initially, the Finance Minister of France, Bruno Le Maire, spoke out about his discomfort of a currency lead by a private data collecting organization such as Facebook. Seeing this, Germany quickly followed suit by releasing a statement of their own, communicating their stance against Libra.
Both countries released a joint statement affirming “no private entity can claim monetary power, which is inherent to the sovereignty of nations”. This remake does not necessarily encompass Bitcoin as it too is a non-sovereign currency circulating all over the world. “France and Germany consider that the Libra project, as set out in Facebook’s blueprint, fails to convince the risks will be properly addressed”
Looks like a Bumby Road for Libra
Facebook’s plans have spooked policymakers and regulators around the world, especially as the social media behemoth plans to launch Libra next year. The Us regulators even questioned the plan of the Libra organization and why their headquarters will be in Switzerland. All this could hider Libra’s payments license from Switzerland’s monetary authority, which Libra gave an application to last week.
Although regulations and investigations can act as hurdles, we believe intense scrutiny will improve consumer confidence in Libra. Moreover, its low-fee transaction will likely encourage consumers to hold and use the digital currency. It remains to be see how the majority of governments will react following the statement from France and Germany.