It appears Libra doesn’t have that many fans. The new digital currency from Facebook is stemming controversy and dislike everywhere it goes, and now the European Central Bank (ECB) is taking what it deems to be necessary action by building its own national digital coin as a means of competing with it.
Libra Just Can’t Find Friends
This isn’t the first time a country (or in this case, continent) has emerged with a new digital currency to fight Libra’s alleged attacks. The first is China, who despite a mixed relationship with digital currency in the past, announced it would be releasing a national virtual token soon to do battle with the Facebook payment system.
This is a country that has banned all foreign exchanges, as well as initial coin offerings (ICOs), and is now considering a ban on all crypto mining, yet when it comes to Libra, China is suddenly feeling the pressure and is vowing to fight with everything it’s got.
The new currency comes by way of financial regulators in both France and Germany. French finance minister Bruno Le Maire and a German associate Olaf Scholz released a statement explaining:
France and Germany consider that the Libra project, as set out in Facebook’s blueprint, fails to convince us that risks will be properly addressed… We encourage European central banks to accelerate work on issues around possible public digital currency solutions.
Facebook has been swamped with controversy over the past two years given its ties to Cambridge Analytica and its secretive behavior of selling users’ private data to third parties for advertising purposes. Mark Zuckerberg was grilled heavily by U.S. Senate members for his involvement in the fiasco, and trust in Facebook has fallen to record lows.
The European Bank has another major solider in the form of Margrethe Vestager, a Danish politician who has been appointed as the European Commission’s executive vice president for digital finance. She also serves as the E.U.’s competition commissioner.
Vestager will be in control of all digital finance projects in the E.U. This involves the bank’s national digital currency. Her job will be to invoke appropriate legislation and fight back against ventures that seek to place customer’s information at risk.
Ursula von der Leyen, the E.U. Commission president-elect, says:
Margarethe Vestager will coordinate the whole agenda and be the commissioner for competition. She will work with the internal market, innovation and youth, transport, health and justice.
The E.U. Is Fighting Back
This week, Facebook applied for a payment service license in Switzerland, though the process isn’t likely to be easy, as it appears Facebook will be treated like a bank. ECB board member Benoit Coeure says that Libra has been a “wakeup call” for the financial system, commenting:
We need to step up our thinking on a central bank digital currency.
Cryptocurrency is a digital currency that uses encryption (cryptography) to regulate the generation of currency and verify the transfer of funds, independently of a central bank. Cryptography is the practice and study of techniques for secure communication in the presence of third party adversaries.
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