While Libra may be having a neutral reception in Switzerland, the EU as a whole is giving the developing stablecoin an icy shoulder. This is in spite of Europe warming to the idea of an EU backed cryptocurrency.
Olaf Scholz, Germany’s Federal Finance Minister, has come to the public showing his support for an EU backed coin. He explained that a payment system like that would only do good for European financial centers. Particularly so in the wake of the rampant globalization of the world.
He stated that the EU shouldn’t leave this field open for other powerful countries, like Russia, the US, or China.
However, he is extremely careful about Facebook’s Libra and the implications of having a corporation issue its currency. Scholz argued that such a power should only be used by the state, stating that a fundamental part of a sovereign state is its ability to produce its currency.
Scholz is part of the popular opinion within the EU about this. The French Finance Minister, Bruno Le Maire, had stated that he would block Libra.
Questions for Libra
As a result of this rising worry and speculation Libra has faced, the European Commission has now asked Facebook and the Libra Association to answer several questions regarding the cryptocurrency. The Libra Association is the organization tasked with supervising the developing cryptocurrency.
Valdis Dombrovskis, EU Financial Commissioner, wants to asses Libra and determine a few things. First would be if they should allow the cryptocurrency within the EU’s shores at all. And, if they do, if it should be regulated with EU’s laws, or a new form of regulation be made to help control a private company-backed cryptocurrency.
This is bad news for Facebook, who have been receiving more and more scrutiny as the weeks go on. Last month, Libra’s founders had to go through a questioning done by 26 central bank officials. In August, Brussels’ antitrust raised their concerns about Libra, specifically it has the potential of causing competition restrictions.
Even the US is sharing these concerns. Maxine Waters, Head of the US House of Representative Financial Committee, had urged Facebook to delay Libra until the regulators gave their approval. The House Committee is still putting pressure against Facebook’s CEO, Mark Zuckerberg, in the hopes that he will testify before Congress about the matter. The hope is it will happen before 2020.
PayPal Pulls Out
PayPal has recently with from Libra, stating that they wish to focus on continuing their missions and projects. They did, however, state that they remain supportive of Libra, and that they want to work together in the future.
While this was a hard blow for the company, it may not be the last. Rumors are circulating that Mastercard and Visa want to pull out as well.
While a rough timeframe of release went out, stating that Libra would come out in 2020’s second quarter, Mark Zuckerberg had denied this plan. He noted that the company had no deadline for release, even if their roadmap shows they’re going full speed ahead with Libra’s development.