On Facebook's Digital Currency


Last week, France and Germany issued a “Joint Statement on [Facebook’s] Libra” that said,

  • "France and Germany reaffirm their willingness to tackle the challenges raised by cryptocurrency and so-called stable coin projects: financial security, investor protection, prevention of money laundering and terrorism financing, data protection and financial and monetary sovereignty.

  • "We acknowledge that there is a need to improve the effectiveness of international payments. At European level, we call today on banks to work on improving European payment systems.

  • "We encourage European central banks to accelerate work on issues around possible public digital currency solutions."

  • France’s finance minister Bruno Le Maire said, “I want to be absolutely clear: In these conditions, we cannot authorize the development of libra on European soil

  • "The monetary sovereignty of countries is at stake from a possible privatization of money . . . by a sole actor with more than 2 billion users on the planet …

  • "I don’t see why we should dedicate so much effort to combating money laundering and terrorist financing for so many years to see a digital currency like Libra completely escape those regulatory efforts.”

  • Separately, a statement by the Swiss Financial Market Supervisory Authority said, “Due to the issuance of Libra payment tokens, the services planned by the Libra project would clearly go beyond those of a pure payment system

  • "The highest international anti-money laundering standards would need to be ensured throughout the entire ecosystem of the project"

  • Finally, US Under Secretary of the Treasury for Terrorism and Financial Intelligence Sigal Mandelker said, “Whether it’s bitcoin, Ethereum, Libra, our message is the same to all of these companies: anti-money laundering and combating the financing of terrorism has to be built into your design from the get-go.”

  • Notes: 1) Libra is a digital currency proposed by Facebook. 2) The project is backed by 27 organizations in areas such as payment, technology, telecommunication, online marketplace, venture capital and nonprofits, 3) a launch is planned for 2020.


  • Projects such as Libra present a "wake-up call" to slow moving central banks. They also increase discussions about the sovereignty of money and the future of central banks and other financial intermediaries.

  • As interest in better global payment platforms increases, successful platforms will require 1) gaining the trust of users, 2) providing a service that is easy to use and understand, and 3) aligning with regulatory processes - which may require updating.

  • As European central banks oppose the efforts of the Libra project, it is still unclear how the Libra platform will actually work.

Paul Dravis