Libra and cryptocurrencies must be regulated, says France

French Finance Minister Bruno Le Maire said Libra posed financial risks could be open to abuse and threatens the monetary sovereignty of governments

Governments and policymakers have been in an uproar ever since Facebook debuted their Libra cryptocurrency to the world, prompting the first signs of stricter regulation around crypto and Bitcoin looming.

Elsewhere in his address, Le Maire urged, once more, for a "public digital currency", without specifying further.

These actors are all needed now to process digital payments, but may no longer be necessary if the European Central Bank took over their functions, slashing transaction costs.

Le Maire said the bloc should also work to cut the cost of worldwide payments, which Libra promises to slash.

France's finance minister says Facebook's Libra cryptocurrency should be barred in Europe because it threatenes "the monetary sovereignty of countries", the Guardian reported.

Among the list of concerned governments is France, whose Finance Minister just revealed that it would work to prevent the "development of Libra on European soil".

In an email to The Register, Valerie Khan, VP of Digital Equity, a non-profit advocacy group based in Switzerland, and co-author of a paper critical of Libra, said Le Maire's concern is welcome because it buys time to look into Libra's real intentions.

While there are potential benefits to this form of setup - such as the circumvention of corrupt authorities and the expansion of asset-holding to those who cannot secure a traditional bank account - this can also mean that the value of virtual coins can fluctuate without being tied to a fiat currency reserve.

While euro zone ministers seem united on a tough regulatory line on Libra, it is less clear whether they agree to set up common rules for virtual currencies.

New EU-wide rules came into force previous year to increase checks on virtual currencies' trading venues with the objective of reducing risks of money laundering and other financial crime.

In the absence of specific regulations, European Union officials are assessing whether existing rules governing financial instruments could apply, but have so far reached no conclusion.

The EU-wide legal vacuum has paved the way for smaller states to fill it.

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