Libra was originally scheduled to be launched in June 2020. This date is likely to be pushed back by the almost total absence of rules around Facebook’s cryptocurrency, which is a major concern for states.
“The most important thing is to comply with the regulators and make sure they trust us,” said Bertrand Perez, Libra’s ceo, on September 27, 2019. He told Reuters at the time that it could delay the launch of the device by one or two quarters without it being a “real problem”. At issue: the lack of regulation around this cryptocurrency, which was originally scheduled to launch in June 2020.
FACEBOOK LANCE THE “LIBRA BUG BOUNTY”
At the end of August 2019, Facebook had tried to reassure by launching the “Libra Bug Bounty” program to “strengthen the security of the blockchain”. Michael Engle, the head of the developer ecosystem for Libra, announced on this occasion that he was “determined to take the time to get it right”. These statements were not enough to reassure states about the future global deployment of this cryptocurrency.
“THE SOVEREIGNTY OF THE STATES AT STAKE”
On 12 September 2019, Bruno Le Maire, Minister of Economy and Finance, seized on the subject at the opening of a conference of the Organisation for Economic Co-operation and Development (OECD) on blockchain. He said he was opposed to “development on Libra on European soil” under current conditions. At the time, he believed that “the monetary sovereignty of states is at stake” and that the international deployment of Libra “will call into question the independence of states”.
With the #Libra project, the monetary sovereignty of states is at stake. Under these conditions, we cannot authorise the development of Libra on European soil. #OECDBlockchain #Blockchainpic.twitter.com/gtCHDCeleY
— Bruno Le Maire (@BrunoLeMaire) September 12, 2019
OF MULTIPLES LEGAL QUESTIONS
Indeed, Libra’s arrival is not without legal questions. And the first, and not the least, can be asked in these terms: how will banking and financial law apply to this project? At the moment, Libra is completely unregulated and competition distortions could result. Moreover, how can we control the operation of exchange platforms that are not controlled at all at the moment? And finally, how to manage the influence on the policy of states whose sovereign debt would be held by the Libra association in cover of the Libras issued?
The second issue is the protection of personal data. The first may relate to available assets and others to user banking data. For now, the terms and conditions of use of CaLibra, the application related to Libra’s payment, state that “CaLibra will not share account information or financial data with Facebook Inc. or any other third party without the consent of the customer (…) account information or financial data of CaLibra customers will not be used to improve advertising targeting on Facebook’s product line.”
SWISS PRIVACY WATCHDOG WATCHES OVER GRAIN
But how will this consent be collected, via a pop-up window that will stay on the user’s screen for a few seconds? To find out more, the Federal Data Protection and Transparency Commissioner (PFPDT), the Swiss privacy regulator, sent a letter to the Geneva-based Libra Association in mid-July 2019. On 19 September, a meeting between the two actors took place. The Libra Association is committed to “developing a uniform data protection standard for the system.” In addition, it will “conduct an impact assessment and take the necessary measures to implement the standard (…) including organisational measures.”
FRANCE LANCE A CALL OF OFFER FOR ANALYSER THE TRANSACTIONS
France is already trying to answer these questions. At the end of May 2019, the Ministry of the Interior quietly launched a tender for the development of software to “monitor, analyze and track transactions in order to de-anonymize bitcoin users”. The aim is to equip the National Gendarmerie, the National Police and Customs to “provide a solution for the analysis of cryptocurrency transactions”.
FACEBOOK WANTS TO BOULEVERSER ACTUAL MONETARY SENS
Since its announcement on June 18, 2019, the cryptocurrency carried by Facebook and 28 international companies has made headlines. At the G7 on 17 July 2019, finance ministers had already addressed this issue. U.S. Treasury Secretary Steven Mnuchin said there were “very serious concerns about Libra, which can be used to launder money or finance terrorism,” according to Le Monde. The proliferation of criticisms would have even created a willingness on the part of some founding members to distance themselves from this project.
Libra should allow users to make transactions via a stand-alone payment app, while also integrating libras payment or payment directly into Facebook-owned Messenger and WhatsApp apps. Its launch is scheduled for 2020, but without a fixed timetable. Inspired by the success of cryptocurrencies, this electronic currency should simplify international money transfers.