France says it won’t allow Libra in Europe
Facebook’s “cryptocurrency” Libra is yet to garner much support from officials.
In fact, with the exception of Mark Carney, the institutional response to the idea has been overwhelmingly negative.
Today we may have seen the most damaging of these attacks. The source: France’s finance minister Bruno Le Maire. This from Reuters:
PARIS, Sept 12 (Reuters) — French Finance Minister Bruno Le Maire said on Thursday Facebook's Libra cryptocurrency cannot operate in Europe under current conditions, citing systemic financial risks, risks for sovereignty, and the potential for abuse of market dominance.
“All these concerns about Libra are serious. I therefore want to say with plenty of clarity: in these conditions we cannot authorise the development of Libra on European soil,” Le Maire said.
Mr Le Maire said little about how he would actually enforce such a ban. But the timing of his remarks is interesting, coming just a day after the Geneva-based Libra Association enquired about applying to become a Swiss-based payments system.
This morning the head of the Swiss regulator, the Financial Market Supervisory Authority, Mark Branson, made clear in this very interesting interview with the Neue Zürcher Zeitung that regulating Libra would have to be a joint effort:
Libra has big ambitions. We did not need foreign pressure to recognise this. In addition, behind the project are successful and huge corporations. It was therefore crystal clear from the start that this project could have huge dimensions and implications . . .
. . . A project of such a global dimension can only be addressed through international co-ordination and consultation with other regulators and regulators. It is illusory to believe that a single country can regulate and oversee a project like Libra on its own. The supervision of a UBS or Credit Suisse does not take place in complete isolation.
Branson also indicated that Libra posed risks more normally associated with a reserve fund, and possibly banks. That would, he suggested, mean that the foundation would have to seek licences far beyond those required for a “pure” payments system.
That doesn’t necessarily mean Le Maire will get his way on a blanket ban, but it looks as though Libra has a long way to go before clearing all the hurdles it needs to to become operational.