France and Germany say they are against the digital currency of Facebook

France and Germany say they are against the digital currency of Facebook.

Berlin, 16.9.2019

In a joint statement issued late last week after a meeting of eurozone finance ministers, France and Germany stated that the Facebook Libra plan „does not convince“ them that the risks associated with security, investor protection, money laundering and terrorist financing, as well as „monetary sovereignty“, are adequately addressed. „We believe that no private entity can claim monetary power inherent in the sovereignty of nations,“ the statement says.

Facebook’s plan to introduce a global digital currency next year has met with great scepticism and resistance from policymakers in the US, including the President. Facebook has since stepped up its lobbying in Washington, DC. The joint Paris-Berlin declaration suggests that the political challenges facing the Libra plans in Europe could be more serious.

A wake-up call: The joint statement by France and Germany concludes: „We encourage the European central banks to speed up work on issues relating to possible solutions for public digital currencies“. What does this refer to? Apparently, the European Central Bank has been quietly working on its own digital currency project.

Now Facebook seems to have inspired the bank to increase the pace. At a press conference after the meeting of finance ministers, ECB Governing Council member Benoit Coeure called the Libra a „wake-up call“. He said it would encourage efforts to expand access to real-time payment solutions in Europe. „We also need to strengthen our thinking about a digital currency for the central bank,“ Coeure said.