Odaily Frontline | Even more difficult: five EU countries join forces to stop Libra

This article comes fromPOLITICO, original author: Bjarke Smith-Meyer

Odaily Translator |

Odaily Translator |

Libra has not yet been released, but has been continuously blocked by many parties. Less than a week ago, Xiao Zha was still trying his best to justify Libra's name at the hearing, but apparently had little effect. According to Politico, the five largest euro zone economies are joining forces to "do their best" to prevent Libra from launching as scheduled.

France is leading the charge, along with Germany, Italy, Spain and the Netherlands. The five countries previously held a series of secret meetings in October to secure a united front against Libra.

The five countries' deputy finance ministers made their position known to the rest of the European Union during a closed-door meeting in Brussels, the Belgian capital, on Monday, the four people who attended said.

Their collective opposition will undoubtedly greatly increase the barriers to Libra's entry into Europe, and may put pressure on Facebook and 20 other companies and organizations, which may eventually cause them to abandon the Libra plan. Prior to this, payment giants such as MasterCard and Visa have left the Libra Association one after another.

First revealed in June, Libra has been met with mixed reviews, but for most regulators, there has been a steady stream of negative voices - they worry that Facebook may allow its 2.4 billion users to use a possible Payments will be made in digital currencies that replace existing currencies, which will undoubtedly weaken the government's control over the country's finances.

Eurozone diplomats and European Commission officials told POLITICO that the French-led coalition is pushing other EU governments to consider banning Libra entirely.

A complete ban on Libra appears problematic in the eyes of the European Commission, officials said. Brussels, for example, would need a legal reason to ban the payments service, and more information on what rules would apply to Libra.

Meanwhile, diplomats are preparing a statement to be issued by finance ministers in December: the Facebook-backed Libra Association should not be allowed to introduce Libra as a tool unless the EU can regulate it.

Libra has also spooked U.S. policymakers. The U.S. government is concerned that the anonymity of cryptocurrencies could help terrorist financiers and money launderers move funds out of the sight of authorities.

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The "opposition" is tough

Paris, Berlin and Rome have floated the idea of ​​banning Libra's launch at a G7 meeting after their finance ministers discussed the risks associated with stablecoins.

However, U.S. Treasury Secretary Steven Mnuchin is reluctant to start issuing policy recommendations on stablecoins. Officials with knowledge of the G7 meeting said Mnuchin would prefer to emphasize only the risks associated with Libra.

European Commission officials also urged caution over France's current move, amid concerns it could paint the bloc as an unfavorable place for tech companies to launch new products and services.

France's allies, however, were less patient.

"We argue that it is necessary to analyze and eliminate all possible associated risks and create an appropriate regulatory and supervisory framework before allowing any such project to start," a Spanish finance ministry official said.

Previously, a Libra representative said the association's "priority is to work with regulators to ensure that all of their questions and concerns are properly addressed."

The Spanish official also said work was underway on a joint statement "with other euro zone member states" on Libra. EU finance ministers are scheduled to briefly discuss the December statement at the next Ecofin Council meeting on 8 November.

A German government official, when asked about it, referred to comments made by German Finance Minister Olaf Scholz this month in WirtschaftsWoche magazine. Scholz said he was "extremely critical" of Libra and opposed private currencies competing with official currencies.

The Geneva-based Libra Association recently answered 32 questions posed by the European Commission's financial services arm.

Odaily Note: As for Facebook's Libra plan, France, Germany and other countries, as well as institutions such as the European Central Bank are still at the stage of "expressing doubts" and have not yet launched a detailed investigation. An authoritative British media said that the European Commission has asked Facebook to answer a series of questions about Libra, including risks to financial stability and people's data privacy, as well as the company's ability to comply with anti-terrorist financing regulations and prevent criminal organizations from money laundering.

Yet the committee team working on the answers learned little new from them, according to officials, and they still don't know how Libra will do business.