Officials Speak Out In Face Of Libra Exodus

Officials in France and Germany have spoken out about a number of companies leaving the Libra Association, a body of businesses meant to act as a sort of governing body for Facebook’s proposed cryptocurrency.

Olaf Scholz, Germany’s finance minister, said the recent exit of companies like PayPal, Mastercard and Visa from the Association was a good thing. He believes Libra is a threat to the global financial market as a whole.

“It’s a good sign that important companies have withdrawn from this project,” Scholz said in an interview with Reuters. “I see the project as a threat to the autonomy of states and to democratic governance in our society. We must ensure that the issuance of a currency remains a matter for states and not large, private companies.”

A senior Bank of France official also told Reuters that those risks, as well as the danger of money laundering or the potential use of the currency for illicit means, must be tackled before the currency is released to the public.

Both Germany and France have previously said they would not participate in use of the proposed cryptocurrency. Ever since Libra was released, regulators and banking officials worldwide have called for more regulation.

Facebook has said Libra will be an independent product, separate from its social media offerings. The Association was intended to illustrate this, but the exit of the companies has added a wrinkle to that premise. 

Denis Beau, the first deputy governor of the Bank of France, said that if cryptocurrencies gained widespread use, it would have an adverse effect on the world economy. 

“If they were to take off, they would raise additional issues in terms of competition, policy, financial stability and monetary policy,” he said. “It’s really important that this is understood and the risks are addressed before any possible rollout.”