By Sam Schechner
PARIS -- Europe should block Facebook Inc.-backed digital currency Libra and create a public alternative, a senior French official said Thursday, staking out a hard line amid broader resistance to the idea from U.S. and international officials.
Bruno Le Maire, France's finance minister, said the Libra project, announced in June, would lead to "an eventual privatization of money," replacing weaker currencies in countries around the world and undermining states' sovereign independence. He also said Libra would undermine the fight against money laundering and boost the risk of a global economic crisis in the event of a technical bug.
"These are serious concerns," Mr. Le Maire said in a speech at a blockchain-technology conference in Paris. "Under these conditions, we can't authorize Libra's development on European soil."
A spokesman for Facebook declined to comment on Thursday, but in the past David Marcus, who leads Calibra, the Facebook subsidiary that developed Libra, has committed to working with regulators and central bankers.
The Libra Association, the Switzerland-based group of 28 companies including Facebook that will be tasked with overseeing the currency, said that Mr. Le Maire's comments "underscore the importance of our ongoing work with regulatory bodies and leadership around the world."
The association added that its members are "committed to working with regulatory authorities to achieve a safe, transparent, and consumer-focused implementation of the Libra project."
Mr. Le Maire's concerns are part of a broader chorus of skepticism about Facebook's plan, which includes an array of other corporate partners and such traditional financial firms as MasterCard Inc.
In July, U.S. lawmakers peppered Mr. Marcus with questions about whether the currency should be subject to banking regulations. At the time, U.S. Treasury Secretary Steven Mnuchin also said that Libra's backers had "a lot of work to do to convince us" that the currency won't be used to fund bad actors, such as terrorists.
Mr. Le Maire's objections, first aired when the currency was announced, are more fundamental. During his speech in Paris on Thursday, Mr. Le Maire rallied against what he described as a "libertarian philosophy that refuses all regulation and denies any role to the state."
"We can combine regulation and new technologies," Mr. Le Maire said, pointing out that France has a legal framework for using blockchain to trade some securities. But he added that "if the price to pay for the emergence of new technologies is the destruction of the state, then it will happen without France and without Europe."
To counter Libra, Mr. Le Maire also said that governments should consider creating a "public digital currency." He said he has discussed multiple options for launching it with departing European Central Bank President Mario Draghi, as well as his successor, Christine Lagarde. He added that he would raise the issue during a meeting with other finance ministers in Washington, D.C., in mid October.
"There is no reason that this Libertarian philosophy should win when it comes to new technology," Mr. Le Maire said.
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