(Bloomberg) -- Facebook Inc (NASDAQ:FB).’s ambitious plan to roll out its own cryptocurrency ran into immediate political opposition in Europe, with calls for tighter regulation of the social-media giant.
French Finance Minister Bruno Le Maire said the digital currency known as Libra shouldn’t be seen as a replacement for traditional currencies.
“It is out of question’’ that Libra “become a sovereign currency,’’ LeMaire said in an interview on Europe 1 radio. “It can’t and it must not happen.”
Le Marie called on the Group of Seven central bank governors, guardians of the global monetary system, to prepare a report on Facebook’s project for their July meeting.
Markus Ferber, a German member of the European Parliament, said Facebook, with more than 2 billion users, could become a “shadow bank” and that regulators should be on high alert.
“Multinational corporations such as Facebook must not be allowed to operate in a regulatory nirvana when introducing virtual currencies,” he said.
Facebook is developing Libra, a stablecoin designed to evade the volatility of Bitcoin and thus be useful for commerce, in partnership with some of the biggest names in payments and technology, such as Visa Inc (NYSE:V). and Uber Technologies (NYSE:UBER) Inc. The new currency will launch as soon as next year and is pegged to a basket of established government-backed currencies and securities.
While Bitcoin, the original cryptocurrency, has attracted a lot of attention since its creation a decade ago, it’s still not widely used for commerce. Facebook meanwhile, plans to build a new digital wallet that will exist inside its Facebook Messenger and WhatsApp services to make it easy for people to send money to friends, family and businesses through the apps.