Thursday 22 August 2019
Libra faces scrutiny of EU regulators
Libra the fledgling digital currency created by US technology giant, Facebook, has attracted the scrutiny of regulators at the EU. According to reports, the European Commission
is concerned over the potential anti-competitive impact of Libra and
has issued requests for information to those associated with project.
The move is part of a preliminary exercise aimed at gathering
information before deciding whether further action is merited.In June, Facebook announced plans to launch its new digital currency, alongside 27 other partners, including the likes of Paypal, Vodafone, Visa and Mastercard (see: As Facebook launches Libra. MyTop “It could be YOU!”). The concept is based on the principles of blockchain and distributed ledger technology, however, there are some doubts as to how closely the technology underpinning Libra will fulfil the accepted definitions.
Taken at face value, the declared ambitions for Libra are appealing. As well as the benefits of lower costs, efficiency and convenience, a digital currency of this type could significantly improve global financial inclusion amongst the unbanked. However, national governments, bankers and politicians have already raised concerns over the initiative. The widespread adoption of a low-cost, digital currency, operating across and beyond national boundaries would clearly be a massive disruptor and could potentially mean a significant loss of control for central banks.
It is not surprising that the EU is the latest body to focus its lens on Libra. Whatever the outcome of the European regulators’ scrutiny, it is unlikely that Facebook will have an easy birth. As far as a judgement on the currency itself goes, it appears to be something akin to a “Hobson’s choice”. Who do you trust more - central governments or big-tech companies?
Posted by Jon C Davies at '08:41'
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