France and Germany said on Friday that Facebook Inc.’s Libra currency presented risks to the financial sector that could block their authorization in Europe, and supported the development of an alternative public cryptocurrency.
Critics have been voiced as the European Central Bank says it is working on a long-term plan to launch a public digital currency that could make projects like Libra redundant.
France’s finance minister, Bruno Le Maire, and his German counterpart, Olaf Scholz, said in a joint statement issued at a meeting of euro zone finance ministers in Helsinki that virtual currencies pose risks to consumers, financial stability and even “the monetary sovereignty” of European states.
“France and Germany consider that the Libra project, as set out in Facebook’s blueprint, fails to convince that those risks will be properly addressed,” they said.
It is also considering a common set of rules for virtual currencies, which are currently largely unregulated. The currency union has worked in past years on several plans to make digital payments cheaper and faster, but none of them has properly taken off so far.
A 28-member Libra Association of Facebook is setting up in Switzerland to manage the currency, said it welcomed the feedback.
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