EU regulators are investigating if Facebook’s planned cryptocurrency will harm competition.
European Competition Commissioner Margrethe Vestager said the move was justified even though Libra hasn’t launched yet.
“We can even look at new services even before they’re introduced. That’s what we’re doing right now, with Facebook’s plan for a new cryptocurrency, known as Libra, which it announced back in June,” Vestager said in a speech at a conference in Bergen, Norway, according to Reuters.
“We’re looking at whether those proposals create risks for competition, so we can be ready to act swiftly if an intervention were to prove necessary,” she added.
Libra was announced with a potential release date of 2020, and Facebook said it would be issued and regulated by the Geneva, Switzerland-based “Libra Association.”
Last month, Vestager sent questionnaires to the 28 members of the association, asking about the conditions for membership, as well as how Libra-backed products and services will be integrated into the social media giant’s many platforms, how the consumer data would be used and who would own it.
Just this past week the European Central Bank (ECB) was advised by ECB board member Yves Mersch that Facebook’s Libra could affect its ability to set monetary policy.
“Depending on Libra’s level of acceptance and on the referencing of the euro in its reserve basket, it could reduce the ECB’s control over the euro, impair the monetary policy transmission mechanism by affecting the liquidity position of euro area banks and undermine the single currency’s international role,” Mersch said.
And last month, US House Financial Services Committee Chair Maxine Waters said that despite meeting with government officials in Switzerland about Libra, she remained concerned about the viability of the currency.
“While I appreciate the time that the Swiss government officials took to meet with us, my concerns remain with allowing a large tech company to create a privately controlled, alternative global currency,” Waters said.
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