Facebook’s new money alerts, the EU Finance Ministers

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The Finance Ministers of the EU see the “national sovereignty” is in danger, because Facebook wants to bring his own money in circulation. Is “Libra” threat of Revolution or opportunity? Bernd Riegert reports from Helsinki.

At their informal meeting in the Finnish capital Helsinki, the Finance Ministers of the EU Meeting heavy verbal artillery against the digital currency “Libra” in position. The national sovereignty was in danger, said the French Finance Minister, Bruno Le Maire and his German colleague Olaf Scholz in a joint statement. “We are convinced that all the issues relating to currencies, should remain a national responsibility,” said Le Maire in Helsinki. Benoit Coeure, a member of the Executive Board of the European Central Bank, looks at the possible consequences of “Libra” for the international financial system and the role of the European common currency, the Euro very carefully. “You can say that the Minister of Finance are very concerned,” said Benoit Coeure. Why all the fuss?

In June, Facebook “CEO Mark Zuckerberg had announced,”with 19 partner companies in the coming year, a kind of parallel currency for the various Internet platforms to introduce the company “Facebook” operates. Billions of users are then to English with the “Libra” (. for the zodiac sign Libra) quickly and with virtually no additional fees to pay. This new cash will keep some business information specialists like Sarah Spiekermann of the Vienna University of Economics for a Revolution. “If the consortium so grant, as it was with all of the digital services of the case, it will be the most impactful Innovation of the decade. Libra is probably on more solid feet than our current money system, is easy to use, and for 1.5 billion Whatsapp users now available,” wrote Spiekermann in the süddeutsche Zeitung.

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Libra is linked to old currencies

The European Finance Ministers are much more sceptical. They fear that “Libra” under the direction of Facebook, Uber, Spotify, Ebay and other companies belonging to the consortium, at a stroke, the business model of many banks into question. Also, Libra is not a crypto currency like Bitcoin. “Libra” is not extracted by the Blockchain technology of computers, but arises from the fact that Facebook-Whatsapp and Instagram-customer trade in their national currencies, in “Libra”. It represents a so-called “stable-coin”. The value of “Libra” will be made by the purchase of fixed-interest bonds and a “basket of currencies” is guaranteed. In the “currency basket” are represented all sorts of national currencies. But, warn the critics, is created for the customer, a price risk. The value of the new “Facebook”-could be fundamental to fluctuate.

The European Central Bank is even concerned that “Libra” could affect the value of the Euro. In the event of a financial crisis, it is completely unclear what would happen if billions of potential “Libra”-customers want to exchange the Internet-currency back into real cash of their national currencies. The EU is currently considering whether it is in “Libra” by a Bank, which would then be subject to all the regulations that apply in the EU today, including the Deposit guarantee for the final customer.

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France wants the state Internet currency

France’s Finance Minister Bruno Le Maire is not opposed to parallel currencies in the Internet completely; he just wants to see you, not in the hands of a private consortium of already dominant, mostly US-American companies. Le Maire and the European Central Bank for the purpose of advertising, to establish a state-regulated digital currency, which is controlled by the national Central banks. EU financial Commissioner Valdis Dombrovskis appealed to the conventional banks to become more involved in cross-border payments and to make this cheaper. A big advantage of “Libra” could be that Transfers, for example from Africa or the U.S. to Europe, which at the Moment are very expensive, almost for free. The cashless Pay, which is widespread in Asia and Africa much more than in Europe, could make coins and Bills, but also classic banks in the medium term unnecessary.

Large commercial banks are currently not involved in “Libra”. But the two credit card companies Mastercard and Visa are the payment processing charges with world wide experience. Data-protection authorities and critical organizations, such as “Finance Watch” fear that “Libra” for the Facebook platforms creates the final gläseren customers, all will have to give its data to the company. To be able to “Libra” to pay, you will have to identify himself with his real name, an identity document and a registration address. Every transaction, every purchase, every Search on the Internet can be a particular Person that puts their personal assets. Because Facebook has noticed by way of data leaks and the deliberate disclosure of sensitive data, for example, of election agencies, the fear of the EU Finance Ministers risks for the end customer. “In the plans of Facebook is not to see how these risks are to be treated”, to criticize the Minister of Finance Scholz, and Le Maire from Germany and France in their joint statement.

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Critics warn of Libra

The “Libra consortium” is registered as a company in Switzerland. The Swiss banking supervision is currently examining whether and how the parallel currency has to be regulated. Since “Libra” will be launched in the coming year, the supervision authorities, Central banks and Finance Ministers under pressure of time, and not just in Europe. In the USA there are quite critical issues of the Congress of deputies, the construction of the “Libra” behind the questions. The Finance Ministers of the G7, the seven most important industrial Nations in the world, had expressed in July are also critical to the new Facebook currency. According to the economic information scientist Sarah Spiekermann six months left to the politicians to act. “Will Libra be landed again in the digital Wallets of the citizens, will be able to explain that no government of Europe’s own citizens more, why it should be banned,” wrote Spiekermann in the süddeutsche Zeitung. “If the European governments are not so within the next six months, the Libra Association prior to the hard service conditions, you will have to watch the money power of Europe is waning, as the power of the media already has taken place.”

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Libra is dominated G7 Meeting

“Species extinction” in the financial sector?

The EU Finance Ministers and the boards of banks, the want to be dapper in dark suits and ties and serious appearing, the existing System store, can smile the Internet blogger Daniel Jeffries, which deals critically with crypto-currencies, only mild. According to the idea of “Libra” by Facebook Jeffries wrote: “This is a turning point in the history of money. This is the event with which the extinction of the world financial order begins. Historians will rate the later as the trigger.”

The European Union has already adopted ten years ago, an E-money Directive and the act on electronic financial services provider. It prescribes in detail, for example, that since this week, payments in the Internet are just with a double safety query and TAN (transaction numbers) is possible. The only question is, whether these guidelines would also be on the “Libra” that exists only virtually, and the operator will have in Switzerland.