Representatives of the euro zone's strongest economies are discussing a ban on Facebook's Libra. This is from a report by Politico Europe, which was published on 30 October. The French-led coalition is pushing ahead with the ban on cryptocurrency in Brussels. Meanwhile, the banking association plans to introduce a counterweight to the Libra: the digital euro. Is the final release for Facebook's cryptocurrency coming up
The five largest economies in the eurozone France, Germany, Italy, Spain and the Netherlands are working together, according to the news magazine Politico , to prevent the launch of Facebook's planned cryptocurrency next year. Politico's Deputy Finance Ministers have presented their unified position against Libra to other EU ministers at a private meeting in Brussels on 28 October, Politico reports.
A joint veto against the introduction of Libra in Europe increases the pressure on Facebook and the companies involved. Mastercard , Visa and PayPal have already announced their withdrawal from the project. According to Politico, officials are working on a statement that will be released in December. It states that Libra will not be allowed until the EU can regulate the currency. Politico also advises on a complete ban on the currency. That could mean the final end for Facebook's currency.
However, the European Commission can not ban Libra without a legal basis. Before that, Brussels needs a clear legal justification and more information about the regulations that should apply to digital currencies like Libra.
A complete ban on the Facebook currency could also be a problem for the Commission. Because a veto could negatively affect the EU as a location for the development of new technologies and services. Commission officials therefore urge caution against strict regulations.
France, Germany and Italy had already proposed the idea of a ban on Libra at the G7 summit in mid-October after finance ministers discussed the risks associated with the stable coin. Facebook responded by announcing that it wanted to introduce several stable coins instead of one currency .
Out for Libra, is the digital euro coming?
The Bankers Association issued a position paper on 30th October in which they put forward several arguments for the introduction of a digital euro. The banking association, which represents more than 200 private commercial banks and eleven member associations, states in the paper that the economy needs a programmable digital euro.
In addition, private banks are in favor of introducing a "pan-European payment transaction platform" for the crypto-based euro. For this, a "uniform regulatory and regulatory framework will be created".
For Andreas Krautscheid, Chief Executive of the Federal Association of German Banks e. V., the responsibility for the monetary system must continue to lie with sovereign states and central banks. Krautscheid says about the introduction of a digital euro:
A digitally programmable euro has the potential to fundamentally change our economic processes, but also how we pay and how we conserve values. It is all the more important to reach a social consensus on how programmable digital money can be integrated into existing financial systems.
The introduction of a digital euro could be another coffin nail for the Libra project. Whether Facebook sticks with so much headwind on the cryptocurrency is questionable. Currently, Facebook's strategy seems to be based on the steadfast pose of Justitia: eyes closed and through.
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Cryptocurrency & Blockchain
A cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets.