Vestager Says Libra’s Potential to Spawn an Economy Raises Risks

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(Bloomberg) -- The European Union’s antitrust chief says she’s taken the unusual step of scrutinizing Facebook Inc.’s planned cryptocurrency because of the risk that Libra will lead to the creation of a new, entirely separate economy.

“It’s a new thing that we’ve begun to ask questions about something that doesn’t yet exist,” Margrethe Vestager said in an interview with Denmark’s finance industry union, Finansforbundet. “But it’s because we want to be far enough ahead that we can say whether this will be a problem.”

Vestager Says Libra’s Potential to Spawn an Economy Raises Risks

The Danish-born EU competition commissioner has already opened an investigation into Facebook’s digital currency project, citing the potential for anti-competitive behavior. One worry is that the Libra may put at a disadvantage parties that don’t use it.

But financial stability concerns may be as central to the probe as competition issues, Vestager said in an extract of an interview due to be published in full on Oct. 11. “It may be that our central banks will be most interested in it.”

Among the “many, many” questions that Vestager said have been put to Facebook are the extent to which the company plans to become a platform for commercial businesses to sell their products and services; what currencies will be accepted; and what does it mean for a company to have its own currency.

©2019 Bloomberg L.P.

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