France has joined the US and UK in saying strong regulations must be in place before Facebook goes ahead with creating its proposed libra digital currency.
The warning came as G7 finance ministers converged on the French town of Chantilly for a two-day meeting where the growing dominance of US tech companies will be a hot topic.
Mark Zuckerberg’s social network proposed a new global payments system and currency linked to its 2.4bn-member social network in June. It has since sparked a backlash from regulators around the world.
Facebook’s poor history on privacy and fears over money laundering are some of the concerns that have been raised.
“We cannot accept to have any exchange currencies with the same kind of power and the same kind of role of sovereign currencies,” French finance minister Bruno La Maire told reporters at today’s meeting.
He added: “There is a need for regulation, there is need for very strong commitments and obligations for that project and for the time being the necessary requirements are not fulfilled by the project libra.”
French European Central Bank (ECB) executive board member Benoit Coeure will present a report to the meeting laying out what cryptocurrencies and digital coins such as libra mean for regulations and the economy.
US and British officials have also issued warnings over Facebook’s plans. Yesterday US treasury secretary Steve Mnuchin said Libra is a “long way away from” being approved by his country’s regulators.
But US senator Sherrod Brown yesterday called Facebook’s plans “delusional” and “crazy” during a hearing of the Senate banking committee, of which he is the ranking member.
“Facebook has demonstrated through scandal after scandal that it doesn’t deserve our trust,” Brown said.
Last week Bank of England governor Mark Carney said Libra had to be “rock solid from the start”.
“This is not learn-on-the-job stuff,” Carney said, emphasising that because it could become a hugely pervasive “systemic payment system”, standards had to be very high.