The French Central Bank will start testing its digital currencyEndy Callahan
The Bank of France will start testing its cryptocurrency in early 2020. This was announced by its Chairman, Francois Villeroy de Galhau. The Chairman stated, "Our goal is to move quickly to experiments and report on the launch of projects by April next year."
Plans and intentions of the Central Bank and the Ministry of Finance of France
The Chairman of the Bank of France spoke about the interest in further developments in the field of CBDC. He focused on the fact that the verification of advanced technologies should be treated "systematically and seriously."
In September, Bruno Le Maire, who holds the position of head of the French Finance Ministry, took the initiative to form the EU's cryptocurrency. He believes that European States must explore ways to increase the speed of international transactions and make them more accessible.
The Chairman of the Bank of France reported on the concerns of many States about the development of the Libra cryptocurrency and similar assets. In the article "Where to buy Libra" , you can learn more about the ways to purchase the token.
The initiative to create a digital asset of the European Union
The French Finance Minister initiated the development of the EU's digital currency. He made this statement in Helsinki, where a meeting of European Finance and Economics Ministers was held. Le Maire noted the need for states to explore preferred methods for lowering the cost of cross-border transactions and increasing the speed of transactions within and outside the European bloc.
Mr. Le Maire said, "I have sent an initiative to the Eurogroup to form a state digital asset, which should be considered at the next meeting of the International Monetary Fund."
France will block Libra's promotion in Europe
The head of the French Finance Ministry noted that the cryptocurrency of the social network Facebook Libra carries threats to the monetary independence of countries. Its development on the territory of the European Union will not be allowed. The Minister emphasized this during the OECD conference.
Mr. Le Maire said, "I will make myself as clear as possible: in modern conditions, we cannot allow the creation of Libra in the bloc of European States."
The huge audience of Facebook users (more than 2 billion people) carries systemic risks. Network problems can cause global financial turmoil.
The Finance Minister said that he doubts that Libra will be able to replace national currencies in countries with serious devaluation. During his speech, he recalled the risks of financing terrorism.
Experts said that France does not have direct leverage over Switzerland. Libra Association was registered in this country. Perhaps the issue concerns the blocking of all programs that work with Libra on the territory of the state, as well as the prohibition of trading operations with a digital asset.
Mark Branson, head of Swiss FINMA, said that Switzerland is open to managing Libra regulation at the supranational level. According to him, other States do not have to put pressure on the Agency, because it is well aware of the scale of Libra. It is expected that the cryptocurrency will be launched before the summer of 2020.
Facebook published Libra white paper and introduced the Calibra wallet
Libra is named the world's stablecoin, as indicated on the coin's official website. It works on the basis of a large-scale, secure and reliable blockchain. The cost of the coin will be linked to reserve assets, and the network will be managed by Libra Association.
A currency baskets and other assets will be used to back Libra. They will create Libra Reserve. This includes government securities from trusted Central banks and Bank deposits. This will provide an opportunity to achieve low volatility. The value of the coin will not be linked to any national currency.
The founding members of Libra Association will serve as node validators at the initial stage. After that, the transition to decentralization is planned. Community representatives evaluated such plans.
According to the documents, technical requirements for node operators are very strict, the Internet speed must be at least 40 MB/sec in order to ensure 1000 transactions per second, and the servers must use SSD drives with a capacity of 16 TB.
Libra's founding members are well-known organizations, including PayPal, eBay, Spotify, Visa, Uber, Xapo, Mastercard, and others. A limit has been set: each investor of the company can have up to 1% of the votes. This requirement applies to Facebook as well.
Libra Association will sell Libra Investment Token to raise funds. Securities will provide an opportunity to receive dividends from reserves. Security tokens will be placed for this purpose. To date, the price of assets and the number of assets that will remain with Facebook is not known.
The minimum investment for participation in the Association is set $ 10 million. This requirement does not apply to other non-profit organizations. It is expected that the annual cost of managing the node will reach 280 thousand dollars.
Libra Association will not be responsible for collecting user information, and network transactions will only have public addresses and amounts. To register custodial wallets, you may need to go through KYC procedures.
The Central Bank of France is actively working to create its own cryptocurrency. Its testing will begin in 2020. The regulator is concerned about the development of the Libra cryptocurrency. Also, the French authorities are initiating the creation and promotion of the European Union's cryptocurrency. With the advent of national digital money, you can get experience of participating in them. To do this, it is enough to purchase a certain number of coins and use them for your own purposes.
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