A new report on comments by French finance minister Bruno Le Maire shows that Facebook’s Libra stablecoin is in jeopardy on the other side of the pond.
CNBC reported September 12 on concerns by Lemaire speaking at the OECD Global Blockchain Policy Forum in Paris, as Le Maire indicated that he feels “the monetary sovereignty of states is at stake.”
“All these concerns around Libra are serious,” Le Maire said, according to Cointelegraph coverage by Marie Huillet. “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.”
This French criticism sounds a lot like some American concerns that have been voiced continually, as U.S. regulators look at Libra and its potential use in economic markets.
The gist of it is that a privately held digital currency could rival fiat currencies and produce instability in national economic systems, which could funnel into the global economy as a whole.
It’s a legitimate argument in that money itself is, as indicated in its moniker “fiat”, a medium of exchange based on somewhat abstract economic value.
It’s easy to imagine Facebook Libra bifurcating markets and fragmenting economic value in ways that create all sorts of confusion and chaos.
That’s likely what Le Maire was referring to and what’s leading US regulators to put the brakes on Facebook’s project even as Libra has already generated many millions of dollars from backers like Visa and MasterCard.
“The result (of Libra) might be a modern version of the type of price volatility that private currencies caused in the US back in the 1830s,” writes Mike Orcutt in the MIT Technology Review, citing economist’s fears and historic precedent of a kind.
Then there’s the general wariness some have when looking at Facebook’s track record.
“Facebook, one of the world’s most distrusted companies, wants us to trust its new Libra cryptocurrency, which, it hopes, will be used by billions of people around the world,” writes Eric Posner at The Atlantic. “We shouldn’t. Libra will almost exactly replicate all the problems generated by Facebook’s social network. Those problems can in turn be traced to the central paradox of Big Tech: The technological innovation that is supposed to liberate us from government ends up subjugating us to a handful of corporations.”
Keep all of this criticism in mind as Libra struggles with regulatory roadblocks on both sides of the ocean.