The group of five European countries led by France is currently making valiant efforts in order to stop Facebook’s currency Libra from launching next year. The group contains big economies of the world, including the Netherlands, Germany, Italy, and Spain.
It is reported that the representatives of these countries are attempting to convince the European Union to ban Libra on a large scale. In fact, the deputy finance ministers have already presented their opinions on Libra in a European Union meeting in Brussels on Monday. Not only is the France-led group trying to put a negative opinion about Libra in the minds of the EU, but they’re trying to get it banned altogether. The efforts would, however, be of no use unless there are actual legal reasons for rejecting Libra.
The European Commission wants to project a more technological friendly image and hence is being cautious with the decision, however, the group is very keen on getting Libra out of the picture. The officials stated:
We defend that it is necessary to analyze and eliminate all possible associated risks, as well as to create an appropriate regulatory and supervisory framework before allowing any such project to be launched.
Apart from this severe backlash from the 5 countries, Libra has had a rough period for some time now. China has also urged the governments of countries with emerging markets that they should totally ban Libra as it could open their financial markets to new threats, the most imminent of which is taking away the hold of financial systems out of the hands of the government. The chief accountant of China’s State Administration of Foreign Exchange (SAFE), Sun Tianqi, advised that there should be regulations and policies that ensure that domestic transactions are not replaced by Libra. He also warned about other threats like money laundering, terror financing, and other illicit activities. He added:
Financial technology can promote the opening up, innovation and development of a country’s financial market but it could also bring a lot of illegal cross-border financial activities. This should be a matter of great concern to all countries, especially emerging markets.
Apart from countries, regulators within the US have also been very skeptical about Libra and how regulations would be brought in order to ensure that Libra does not facilitate any illicit activities. Congress has also shown huge concerns related to privacy as Facebook has had a bad history with maintaining people’s data. Given these circumstances, the life of Facebook has been made a lot harder considering Mark Zuckerberg wants to play safely in accordance with the regulators.