Germany’s Federal Cartel office has told reporters anti-trust laws will be applied to cryptocurrencies backed by large internet companies. The news comes only weeks after Facebook unveiled the Libra.
In the past two weeks, financial watchdog groups and central bankers have been quick to criticize Facebook’s new cryptocurrency. With plans to create a ‘cryptocurrency task force’ for G7 countries, most have expressed skepticism of the social media giant’s planned Libra currency.
Germany’s Federal Cartel Office echoed these same concerns today, telling reporters that antitrust laws could be applied to the Libra and other big tech company which seeks to do the same.
The Federal Cartel ultimately fears that the Libra could become so popular that it has the potential to disrupt global monetary policy. Germany’s antitrust watchdog president, Andreas Mundt, said that the Libra “could become a topic for us” in the future. In the past, he has overseen antitrust lawsuits against other aspects of Facebook’s business.
Mundt was previously responsible for bringing lawsuits against Facebook’s data-mining practices and claims that the company is abusing its market dominance. In February, the Federal Cartel Office instructed Facebook to cease these practices. Although the social media firm appealed, the decision is now left to the courts.
Libra Still on Track for Release
There is still sparse info over which aspect of antitrust legislation could apply to Facebook’s Libra. This is partly due to the fact that there is no such precedent; no company has ever threatened a country’s monetary policy like the Libra. Many regulators and central bankers thus fear that Facebook’s cryptocurrency could undermine their own sovereign currencies, making Facebook the de facto ‘bank’ of the world.
Recently, the US Federal Reserve Chairman echoed similar concerns and said that expectations are high for the Libra. It will have to match incredibly high standards if it wishes to be green-lit for usage.
However, no major institution has come out and outright denied Libra’s right to exist. It seems that, despite these legal hiccups, Libra is still on track to be issued sometime in early 2020.
Do you believe Facebook will be able to resolve its legal trouble and issue the Libra on time? Let us know your thoughts below.