US (GN) - France says it will block development of Facebook’s Libra digital currency in Europe because it threatens the “monetary sovereignty” of governments. Finance Minister Bruno Le Maire said Libra posed financial risks and could be open to abuse.

However, he did not spell out how France could keep Libra out of the 28-member European Union.

The social media giant announced plans for a currency in July, but the project has faced hostility and scepticism. Talking about Libra at a meeting of the Organisation for Economic Co-operation and Development, in Paris, Mr Le Maire said: “This eventual privatisation of money contains risks of abuse of dominant position, risks to sovereignty and risks for consumers and for companies.” “Libra also represents a systemic risk from the moment when you have two billion users. Any breakdown in the functioning of this currency, in the management of its reserves, could create considerable financial disruption,” said Mr Le Maire.

“All these concerns about Libra are serious. I therefore want to say with plenty of clarity: in these conditions, we cannot authorise the development of Libra on European soil.”

Although Libra would not be decentralised, like other cryptocurrencies, control would be give to a Switzerland-based non-profit association.

But in another setback for Libra, this week Switzerland said the proposed payments system could face strict rules that typically apply to banks, on top of tough anti-money laundering laws.

The European Commission has responded to Mr Le Maire’s announcement, saying it would look at all aspects of Libra to understand issues ranging from tax concerns to worries over data privacy.

Asked about France’s stance, Vanessa Mock, a spokeswoman for the commission, said: “It’s likely that once we know more [about] the contours of the currency, the project will require some form of authorisation in Europe.”