The head of Germany’s Federal Cartel Office said on Thursday (June 27) that cryptocurrency backed by large tech companies could be put under a microscope by antitrust regulators, according to a report by Reuters.
The news came in response to Facebook’s announcement that it was planning to release a cryptocurrency of its own, called Libra. Many bankers and financial analysts voiced concern that the new currency could alter the global financial framework.
Andreas Mundt, Germany’s antitrust watchdog president, has gone after Facebook for data mishandling and messaging, and found that the company took advantage of its market position. He stated that crypto created by companies “could become a topic for us.”
In February, the Federal Cartel Office ruled that Facebook had to reduce its data collection protocols. Facebook appealed, and the case is playing out in German courts.
In other Facebook Libra news, Libra could be just the beginning for Facebook’s currency plans. “If we are successful at providing a wallet that allows people to store money securely, and send to anyone anywhere in the world, then, over time, we think there will be an opportunity to provide more financial services for people. You can imagine things like credit,” said Kevin Weil, vice president of product at Calibra, according to CNBC.
Along with announcing its planned cryptocurrency, the social media giant revealed it will create Calibra so users can store and exchange the currency using Facebook apps. Weil said Calibra will also allow more people to shop through Facebook’s apps via services, including Facebook Marketplace and Instagram Checkout, as well as enable more businesses to reach customers using Facebook advertising. Weil pointed out, however, that purchase data will not be used for ad targeting.
“There are a lot of businesses that would love to be able to reach customers nearby by using Facebook advertising, but because they operate primarily in cash, [they] have no real ability to pay for that,” he said. “So, it’s also an expansion of Facebook’s advertising platform over time, because [there’ll] be more businesses [that] are able to pay for advertising cheaply and easily.”