Facebook defends Libra cryptocurrency plans amid call for Europe-wide ban

17 September 2019, 09:48 | Updated: 17 September 2019, 12:35

Facebook has refuted suggestions that its upcoming cryptocurrency could threaten existing monies and banks.

The company has been met with ever-increasing scepticism over its digital Libra currency, which is scheduled to launch before the middle of next year.

Earlier this month, French finance minister Bruno Le Maire said Libra should be banned from operating in Europe because of concerns about sovereignty, financial risks and potential market dominance.

Executives from the Libra Association, a dedicated body set up by Facebook to manage the cryptocurrency, met with central banking regulators on Monday in a bid to quell such fears.

Figures from the US Federal Reserve and the Bank of England were reportedly among those who attended.

On the same day as the meeting, the co-creator of Libra, David Marcus, appeared to touch on a few of the key talking points from the discussions in a series of tweets.

He insisted that the currency, which is supposed to launch alongside a wallet app called Calibra, would not "threaten the sovereignty of nations when it comes to money".

"Libra is designed to be a better payment network and system running on top of existing currencies, and delivering meaningful value to consumers all around the world," he said.

"Libra will be backed 1:1 by a basket of strong currencies. This means that for any unit of Libra to exist, there must be the equivalent value in its reserve.

"As such there's no new money creation, which will strictly remain the province of sovereign nations."

Mr Marcus also said he believed in "strong regulatory oversight" over Libra, with concerns expressed over the security and privacy of its users.

Nations aside from France have already cast doubt on Libra, with Switzerland having said that the proposed payment system should face strict rules typically reserved for banks.

Bank of England Governor Mark Carney is also among those who has suggested Libra would face strict regulation, and the UK data watchdog has raised privacy fears over how customer details would be protected.

Facebook has said it will not launch Libra until it has the backing of regulators, but the push-back is likely to continue.

The social media giant suffered major damage to its reputation since the Cambridge Analytica data scandal last year, especially when it comes to security and privacy.

There was global outrage when it emerged the political consultancy firm had harvested the data of millions of Facebook profiles without consent - and used it for political advertising.