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Facebook’s cryptocurrency is already facing political pushback in Europe

Facebook’s cryptocurrency is already facing political pushback in Europe

– French Finance Minister Bruno Le Maire says it’s “out of the question” that Libra becomes a “sovereign currency.”

– Bank of England Governor Mark Carney says the currency will be “subject to the highest standards of regulations.”

– Forrester says regulators are likely to raise questions over Facebook’s data collection and management process.

Facebook unveiled its Libra cryptocurrency on Tuesday, and it didn’t go unnoticed by European officials.

Hours after the company announced its crypto ambitions, French Finance Minister Bruno Le Maire poured cold water on the project.

Le Maire said it was “out of the question” that Libra becomes a “sovereign currency,” Bloomberg reported, citing comments made on Europe 1 radio. “It can’t and it must not happen,” he added.

The Group of Seven (G-7)— which includes France, the U.K. and U.S. — is looking to set up a forum to assess the risks of digital currencies like Libra to the financial system. That’s according to the Financial Times, which cited a letter from Le Maire and Banque de France Governor Francois Villeroy de Galhau. The group will include central banks and the International Monetary Fund, the FT reported.

Meanwhile, Markus Ferber, a German member of the European Parliament, warned Facebook could become a “shadow bank” with the virtual currency plans, according to Bloomberg. Many experts see Facebook’s foray into crypto as a promising sign for the industry, but say regulatory hurdles could be an area where the venture could potentially stumble.

“The news comes at a time when Facebook is under intense pressure from regulators, shareholders, and users to address privacy shortcomings,” said Aurelie L’Hostis, senior analyst at Forrester.

Facebook working with financial firms like Visa and Mastercard means “we can expect regulators and governments to raise questions regarding Facebook’s financial data collection and management process, and whether that system meets all legal and regulatory requirements,” L’Hostis says in a note Tuesday.

Facebook’s cryptocurrency is already facing political pushback in Europe, CNBC, Jun 19
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