FILE PHOTO: Shadow of a 3D-printed Facebook Libra cryptocurrency logo is seen near cryptocurrency representation in this illustration taken, September 13, 2019. REUTERS/Dado Ruvic/File Photo
LONDON (Reuters) – The risks posed by cryptocurrencies such as Facebook’s Libra must be addressed before any launch, a senior Bank of France official said on Tuesday, adding to a chorus of regulatory scepticism that threatens to derail the project.
Since Facebook announced its plans for Libra in June, politicians and regulators around the world have voiced concern about the project, saying it risked upsetting global financial stability, undermining users’ privacy and enabling money laundering.
In the latest warning shot, Denis Beau, first deputy governor of the Bank of France, said the widespread use of such cryptocurrencies was fraught with peril.
“If they were to take off, they would raise additional issues in terms of competition, policy, financial stability and monetary policy,” he told Reuters in an interview.
“It’s really important that this is understood and the risks are addressed before any possible rollout.”
The Libra Association, a body set up by Facebook to oversee the project, said on Monday that the cryptocurrency’s launch, planned for June 2020, may be delayed because of regulatory hurdles. The comments came after a quarter of Libra’s initial members, including major payments firms Visa and Mastercard, abandoned the project.
Libra is a so-called stablecoin, differing from most other cryptocurrencies in that it will be backed by a reserve of real-world assets, including bank deposits and short-term government securities.
The structure is intended to foster trust and stabilize the price volatility that plagues cryptocurrencies and renders them impractical for commerce and payments.
Reporting by Tom Wilson; Editing by Pravin Char