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France, Germany, Italy join forces against Facebook's cryptocurrency


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France, Germany, Italy join forces against Facebook's cryptocurrency

France, Germany and Italy are working on measures to block the use of Facebook Inc.'s Libra cryptocurrency in Europe, according to Al Jazeera, citing a statement from French Minister of Economy and Finance Bruno Le Maire.

Facebook's power to "decide to use more or fewer dollars or euros" may impact the exchange rate between the two currencies and may have a direct impact on industries and countries using them as a base currency, Le Maire was quoted as saying.

The official instead suggested that France could develop a digital currency under a "European framework."

The G-7 echoed similar concerns about using digital currencies developed by private entities. In a report released by the group, the G-7 said any global stablecoin project should not begin operation until the legal, regulatory and oversight challenges and risks are "adequately addressed, through appropriate designs and by adhering to regulation that is clear and proportionate to the risks."

It said global stablecoins "could have significant adverse effects, both domestically and internationally, on the transmission of monetary policy, as well as financial stability, in addition to cross-jurisdictional efforts to combat money laundering and terrorist financing."

The Financial Stability Board plans to work with standard-setting bodies to assess potential regulatory gaps around global stablecoins. The international body will deliver findings to the G-20 finance ministers and central bank governors in April 2020, with a final report in July 2020.

David Marcus, head of Facebook's digital wallet subsidiary Calibra Inc., said the company is considering alternative ways to stabilize Libra in response to concerns, according to Reuters. It originally suggested pegging Libra to a synthetic unit.