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EU looking to see if Facebook's Libra currency poses competition risks

EU looking to see if Facebook's Libra currency poses competition risks
FILE PHOTO: Representations of virtual currency are displayed in front of the Libra logo in this illustration picture, June 21, 2019. REUTERS/Dado Ruvic -
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Dado Ruvic(Reuters)
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By Foo Yun Chee

BRUSSELS (Reuters) – EU regulators are examining Facebook’s proposed Libra cryptocurrency to see if it harms competition, Europe’s antitrust regulator said on Wednesday, the latest watchdog to voice concerns about the social network’s move into financial services.

European Competition Commissioner Margrethe Vestager said scrutiny was justified even though the new digital coin, to be backed by four official currencies and available to billions of Facebook’s users around the world, has yet to be launched.

“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 the text of a speech at a conference in Bergen, Norway.

“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 said.

Last month, she sent questionnaires to the 28 members of the Geneva-based Libra Association set up to govern the new currency, asking about the conditions for membership, according to an EU document seen by Reuters.

The document also asked how Libra-backed products and services will be integrated into Facebook’s platforms WhatsApp, Messenger, Instagram and Calibra, how the consumer data would be used and who would own it.

Politicians, central bankers and regulatory watchdogs have in recent months sounded the alarm about Libra and the disruption risks to the global financial system and the possibility that it may be used for money laundering.

Facebook could not immediately be reached for comment on Wednesday.

(Reporting by Foo Yun Chee; Editing by Mark Potter)

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