Facebook’s cryptocurrency project reportedly met with harsh criticism from European officials

Facebook just stepped into the cryptocurrency race by announcing its own digital currency called Libra. Running on the blockchain, the new cryptocurrency is slated to formally launch in 2020. The social media giant also announced a new digital wallet called Calibra, which will enable users to save, spend, and send Libra. While the company is obviously touting positive benefits of opting for the new digital currency, the project is being met with harsh criticism from European officials.

As per a Bloomberg report, in an interview on Europe 1 radio, the French Finance Minister Bruno Le Maire expressed his apprehension towards Facebook’s cryptocurrency. He said it can’t be seen as a replacement for traditional currency and must not “become a sovereign currency.”

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“It can’t and it must not happen,” he added. The Minister is said to have called for G7 banking officials to develop a report on Facebook’s project, which will be discussed in a meeting next month.

Markus Ferber, a German member of the European Parliament, also voiced his concern over the new cryptocurrency. As per the report, he said that with over 2 million global users, the project could turn into a “shadow bank” and that regulators need to be on high alert. As mentioned earlier, Facebook’s cryptocurrency project is expected to launch by 2020. The company will also tie it with its existing services like Messenger and WhatsApp by introducing the Calibra wallet within these apps.

Libra is a stablecoin whose value is expected to be less volatile as compared to other cryptocurrencies. This is made possible by pegging the digital currency with something of intrinsic value. Facebook also formed the nonprofit Libra Association with 27 other partners who oversee Libra and its development. This association comprises of nonprofit organizations, crypto firms, venture capital firms, and other companies like eBay, PayPal, Stripe, Spotify, Uber, Lyft, Coinbase, Mastercard, Visa, and Vodafone.