Cryptos

Libra alarm sounded in Europe

The European Central Bank warned Facebook that the bar for regulatory approval of its planned libra project has been set very high as governments in the region express concerns about digital currencies.

The projects are wrought with risks, including a possible “race to the bottom” in terms of regulatory arbitrage, European Central Bank executive board member Benoit Coeure warned. “There are very strong concerns,” he said in Helsinki on Friday, calling for a global approach to cryptocurrencies. “We have to look very carefully at these projects, the bar for regulatory approval has been set very high.”

Euro-zone policy makers have sounded the alarm over libra ever since Facebook unveiled its plans in June. French central bank governor Francois Villeroy de Galhau has warned that it raises serious questions about money laundering and data protection. European Union antitrust authorities are also conducting an early-stage probe examining how libra will be run and how the new payment system will work.

The European Commission is currently assessing if a specific regulatory framework is needed for libra, Valdis Dombrovskis, an EU Commission vice president, told reporters in Helsinki on Friday following a meeting of euro-area finance ministers. “Today’s discussion indicated that there are certain concerns, including financial stability obligations.”

Even so, “the libra project has prompted fresh thinking on how to improve our payment systems,” ECB’s Coeure said.

French finance minister Bruno Le Maire called for a discussion over the possibility of a public digital currency, and over reducing the cost of international transactions. “I’m deeply convinced that we should refuse the development of libra within the EU,” he said.  — Reported by Kati Pohjanpalo and Leo Laikola, with assistance from Nikos Chrysoloras, (c) 2019 Bloomberg LP

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