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EU Antitrust Probe Is Facebook-Led Libra’s Latest Headache

In the latest example of rising regulatory scrutiny into Mark Zuckerberg’s cryptocurrency project

EU Antitrust Probe Is Facebook-Led Libra’s Latest Headache
Libra is a reserve-backed cryptocurrency that allows people to send, receive and secure their money on the Libra Network. (Source: Verified Twitter Account of Libra).  

(Bloomberg) -- The new Libra digital currency hasn’t even launched yet, but barely two months after the Facebook Inc.-led association announced its plans, it’s already facing a number of stumbling blocks. In the latest example of rising regulatory scrutiny into Mark Zuckerberg’s cryptocurrency project, Bloomberg on Tuesday reported that the European Union’s antitrust watchdog is investigating Libra, raising questions about the prospects of success for the digital coin.

*June 18, 2019: Facebook announces plans to help create the Libra coin with 27 partners, including Visa Inc., Mastercard Inc. and Uber Technologies Inc. The digital currency, which would be tied to established government-backed currencies and securities, is set to launch as soon as next year.

*June 18: U.S. Representative Maxine Waters, chairwoman of the House Financial Services Committee, urges Facebook to halt development of the token until regulators can examine it.

*June 22: Burkhard Balz, board member of Germany’s central bank, says in a newspaper interview that there’s a danger the token could circumvent regulatory requirements for money laundering and terrorist financing.

*July 10: Federal Reserve Chairman Jerome Powell tells lawmakers at a House Financial Services Committee hearing in Washington the Libra token “raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability.”

*July 11: Bank of France Governor Francois Villeroy de Galhau says of the Libra project at a committee hearing at the French Senate: “The more we investigate this project, the more we have serious questions.”

*July 11: President Donald Trump criticizes the plans on Twitter, saying Libra “will have little standing or dependability.”

*July 14: The House Financial Services Committee’s Democratic majority circulates a draft bill proposing to prohibit big tech companies from offering banking or other financial services.

*July 15: Speaking from the White House, Treasury Secretary Steven Mnuchin says he has serious concerns about the national security implications of Facebook’s coin.

*July 16-17: During hearings on the proposed Libra cryptocurrency, Democratic lawmakers say the plans pose privacy and national security risks. Facebook executive David Marcus vows that the company will take the time to address all concerns raised.

*July 17: Pierre Moscovici, European economics commissioner, tells Bloomberg TV that Libra “raises major concerns and it’s certainly not ready to happen.”

*July 19: U.S. Senator Dianne Feinstein, the top Democrat on Senate Judiciary Committee, says in a letter to Mnuchin that she has “significant concerns” over Facebook’s cryptocurrency and says Libra could undermine U.S. monetary policy.

*Aug. 5: In a joint statement, international data privacy watchdogs from the U.K., Australia, Canada and the U.S. Federal Trade Commission call for more transparency about the Libra currency and its infrastructure, as well as for details about how customers’ personal data will be processed.

*Aug. 20: Bloomberg reports that the European Commission is investigating potential anti-competitive behavior related to the Libra Association amid concerns the proposed payment system would unfairly shut out rivals.

To contact the reporter on this story: Natalia Drozdiak in Brussels at ndrozdiak1@bloomberg.net

To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Anne VanderMey, Andrew Pollack

©2019 Bloomberg L.P.