France will block Facebook's Libra cryptocurrency in Europe

France will block Facebook's Libra cryptocurrency in Europe

France has warned it will block development of Facebook's planned Libra cryptocurrency in Europe.

Speaking at an OECD conference on cryptocurrencies, economy and finance minister Bruno Le Maire said it poses systemic financial risks and the potential for abuse of market dominance.

'All these concerns about Libra are serious,' he said. 'I want to be absolutely clear: In these conditions, we cannot authorise the development of Libra on European soil.'

It comes as Facebook and its partners asked financial authorities in Switzerland to evaluate their plan to create the new digital currency.

The company said it would set up a nonprofit association headquartered in Geneva, putting it under Swiss regulatory authority.

Yesterday, the Swiss Financial Market Supervisory Authority, known as FINMA, said the proposal has to meet anti-money laundering requirements and other strict standards.

That includes obtaining a 'payment-system license' that makes the association responsible for bearing 'the returns and risks associated with the management of the reserve.'

Plans for Libra were officially announced earlier this year and it's expected to launch in mid-2020.

The digital currency will be stored in a digital wallet called Calibra, a standalone app on a user's smartphone or housed within Facebook-owned services such as WhatsApp and Messenger.

It has been backed by Visa and Mastercard, as well as businesses such as Uber, Spotify and eBay meaning eventually users will be able to use the currency to pay for almost anything from their weekly shopping to an Uber journey or their Spotify subscription.

The two biggest issues for cryptocurrency so far, Facebook argues, have been scalability and volatility.

Bitcoin, for example, has seen its price fluctuate violently in recent years as its price is linked to supply and demand.

However, Libra is to be backed by a reserve of assets - including linking it to several international currencies - from a number of central banks in order to keep its pricing stable.

The developers have said that launching it through Facebook apps will also make it immediately accessible to more than two billion people globally - the number who use a Facebook app each month.

Exactly how the new crypto-coin will work is unclear at present, however, even to members of the currency's consortium, the Wall Street Journal reported.

Libra will need to overcome various regulatory hurdles that face the establishment of a new cryptocurrencies, as well as alleviate concerns that the token could be used for money laundering and the financing of terrorist organisations.

Mirroring the format favoured by Bitcoin's pseudonymous creator Satoshi Nakamoto, Facebook will reportedly be releasing a white paper introducing the coin next week.

Facebook, Mastercard, PayPal, Visa and Uber did not immediately respond to requests for comment.