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Facebook to press on with Libra cryptocurrency launch despite French and German opposition

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Facebook to press on with Libra cryptocurrency launch despite French and German opposition
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REUTERS/Stephen Lam
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Facebook still aims to launch its Libra digital currency next year, its executive overseeing the project told Swiss newspaper NZZ, as the company presses ahead despite authorities around the world pouring cold water on the plans.

Since the US tech company unveiled its plans in June, its proposed cryptocurrency has met with regulatory and political scepticism, with France and Germany pledging to block Libra from operating in Europe.

"The goal is still to launch Libra next year," Facebook's David Marcus told NZZ in an interview published on Friday.

"Until then, we'll need to address all questions adequately, create a suitable regulatory environment."

Read more: What is Facebook's new digital currency Libra? | Euronews explains

The social media giant's project, announced as it expands into e-commerce, is a high-profile attempt to drag cryptocurrencies into the mainstream.

Libra will be backed by a reserve of real-world assets, including bank deposits and short-term government securities, and overseen by a 28-member organisation.

The structure is intended to foster trust and stabilise the price volatility that plagues cryptocurrencies and renders them impractical for commerce and payments.

Marcus said it was unlikely Libra coins would become a means of payment for regular real-world transactions in countries like Switzerland, Germany or France, but would rather be used for cross-border payments or for settling very small sums.

"It's unlikely in any case the people will pay for an espresso in Switzerland, Germany or France with Libra in the future," he said. Initially, he added, he expected user acceptance to be a bigger problem than regulatory issues.

Read more: France wants to block Facebook's new Libra cryptocurrency from Europe

Authorities' concerns have centred on the project's potential to destabilise the global financial system, interfere with sovereign monetary policy and harm privacy as well as its potential for use in money laundering.

Marcus said he did not believe the project would interfere with monetary policy, since it would not be creating any new money and would not influence interest rates or yields.

Facebook's Calibra digital wallet, which will allow consumers and vendors to hold and transact the digital currency, would be made available everywhere that it is able to meet regulatory requirements, Marcus said.

Facebook would not be able to access data from its newly created subsidiary Calibra, he added.