France Hates Facebook’s Libra So Much it’s Developing its Own Digital Currency
- Trials for a French wholesale central bank digital currency will kick off next year.
- France is responding to the threat posed by Facebook’s Libra to monetary policy sovereignty.
- The EU country is hoping to be the first to issue a wholesale CBDC.
Immediately after Facebook announced its plans for a global cryptocurrency, France emerged as one of the social media giant’s biggest opposition to Libra. One of the arguments that French officials put forward in their case against Libra then was that the private firm-backed cryptocurrency was an attack on the monetary sovereignty of nations.
Now France has moved to respond to the threats posed to its monetary sovereignty by embracing blockchain technology to issue its own cryptocurrency.
France to start CBDC trials in 2020 and beat Facebook’s Libra to the finish line
Per François Villeroy de Galhau, the governor of the French central bank Banque de France, testing of a wholesale central bank digital currency will kick off next year. Notably, the central bank governor cited Facebook’s plans as a reason to move swiftly.
According to Villeroy de Galhau, having a central bank digital currency will enable reserve banks to “assert our sovereignty in the face of private-sector initiatives such as Libra”
And in what may be viewed as a swipe at the flagship cryptocurrency, the governor of the Banque de France indicated they were more worried by stablecoins such as Libra than “speculative crypto-assets such as bitcoin”
The new gold rush?
The French central bank is hoping to benefit from its pioneering work on a wholesale CBDC:
I think there would be some advantage in moving rapidly to issue at least a wholesale CBDC, as we would be the first such issuer in the world and would thus reap the benefits of having a benchmark CBDC.
While the French central bank governor was not particularly vocal regarding Libra when it was announced, the French finance minister Bruno Le Maire stood out with his criticisms of the project.
In one instance, Le Maire vowed that Libra, as had been proposed in the original white paper would not be allowed on “European soil”. Facebook’s Libra started off the blocks first but if Banque de France sticks with the timelines, the French wholesale CBDC will be the first at the finish line.
This article was edited by Samburaj Das.