France can block Facebook's Libra in Europe

According to country's finance minister the cryptocurrency might put the sovereignty of governments at risk

France will not authorise the development of Facebook’s proposed cryptocurrency libra on European soil, Finance Minister Bruno Le Maire said on Thursday.

Speaking at an OECD conference in Paris, he pointed out that Libra would put the sovereignty of governments at risk. In addition he highlighted issues with money laundering and terrorism financing. “All these concerns around libra are serious. So I want to say this with a lot of clarity: In these conditions, we cannot authorize the development of libra on European soil,” Le Maire said.

Le Maire has been an outspoken opponent of Libra since Facebook unveiled the project in June.

Meanwhile, newswires reported that the non-profit membership organisation set up to run Facebook’s Libra cryptocurrency project is seeking to apply for licensing as a payment system in Switzerland.

The news was later confirmed in a guidance note on stablecoins by Swiss financial regulator FINMA. The watchdog said it received a request for an assessment of how it would classify the Libra project as currently planned. The agency added that range of services projected by the Libra Association would need extra oversight.

“Due to the issuance of Libra payment tokens, the services planned by the Libra project would clearly go beyond those of a pure payment system," FINMA said, noting this mean it would be subject to such additional requirements.

In an “indicative classification” of the Libra project, FINMA also said a project would fall under financial market infrastructure regulation and, as currently planned, “would require a payment system licence from FINMA.”

Regulators globally have been raising concerns that Libra would raise the risk of money laundering via its global cryptocurrency available to billions of Facebook users. Just a few days ago, US Treasury official Sigal Mandelker said Facebook’s Libra must thus meet the highest standards of regulatory compliance prior to any launch.

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