Europe’s powerful economies are keeping Libra at an arm’s distance. Recently, the French finance ministry announced that Germany and France have agreed on Libra prohibition. The decision will hurt the Cryptocurrency’s prospects, especially if other governments start following suit.
No Place for Libra
The two European powers released a joint statement reiterating their stance that “no private entity can claim monetary power, which is inherent to the sovereignty of nations.”
Last week, Bruno Le Maire, the French finance minister adopted a critical stance on the social network’s cryptocurrency. He noted that the coin would pose threats to the country’s sovereignty and present financial risks too. He also said that Libra should not be permitted within Europe.
Regulators Are Concerned Too
A group of 26 global banks, including the Bank of England and US Federal Reserve, is expected to meet Libra representatives in Basel to discuss issues related to state sovereignty. The Financial Times recently reported that the regulators would question Facebook over its plans on launching Libra and the threat it poses to financial stability around the world.
Regulators are afraid that given its cross-country operations and lack of banking best practices, Libra will be used for money laundering and terrorism financing. Similar issues arose during two hearings with Facebook reps on Capitol Hill in July this year.
The company previously said that it would be working with regulators for the smooth sailing of Libra’s operations. They announced the currency a year earlier to ensure that they and the regulators are on the same page. However, they have received negative commentary from governments and regulators. Even US President Donald Trump criticized Facebook in a series of tweets and said that the US Dollar is the only currency for the country. He also advised the social networking company to get a banking charter.