France and Germany released a joint statement on Friday (Sept. 13) that calls out Facebook’s proposed cryptocurrency Libra as potentially harmful to the financial sector, warning that it could block the coin’s authorization in Europe.
Reuters is reporting that the two countries are instead throwing their support behind the idea of a public crypto.
The European Central Bank (ECB) recently said it was working on a public digital currency that would make projects like Libra unnecessary.
France’s Finance Minister Bruno Le Maire and Germany's Olaf Scholz said cryptocurrencies like Libra are dangerous to consumers and could damage financial stability, as well as the “monetary sovereignty” of European countries.
“France and Germany consider that the Libra project, as set out in Facebook’s blueprint, fails to convince that those risks will be properly addressed,” they said.
The EU is taking a tough, regulatory-laden approach to Facebook’s Libra, and is considering coming up with a common set of rules for cryptocurrencies in general.
ECB board member Benoit Coeure said that when Facebook announced Libra, it was a “wake-up call” for Europe to come up with a cryptocurrency of its own. He said the announcement helped to spur on the revival of efforts for the ECB to provide the euro zone with real-time payments, a project known as TIPS. “We also need to step up our thinking on a central bank digital currency,” he added.
The proposed crypto project, of which very little is known so far, would allow consumers to use electronic currency that would be directly deposited into the ECB, eliminating the need for bank accounts, clearinghouses or intermediaries. Le Maire said the endeavor was intended to reduce the fees on international payments. “We encourage European central banks to accelerate work on issues around possible public digital currency solutions,” he said.