The European Commission, an executive branch of the EU, has initiated their inquiry into Libra’s ability to suppress rivals and create a financial monopoly. Reports from Bloomberg, August 21, 2019, confirm that the European Commission is scrutinizing the consortium of companies involved with Libra. Visa, MasterCard, Facebook, and the Commission have declined Bloomberg’s request for comment.
The Threat of Libra
The bright side in this news is that unlike the United States, the European Commission is taking a more ‘democratic’ approach and investigating the project before trying to pass bills barring an entire industry from expanding into a specific niche.
Officials from the European Union are reportedly concerned as to how Facebook will facilitate the exchange of consumer data. Additionally, the EU is investigating Facebook’s ability to dominate the payments sector and establish a potential monopoly, pushing their rivals out of the game. The EU has previously targeted tech giants Apple and Google for this very reason.
Facebook has more users than most countries population, making their ability to establish monopoly quite strong. Libra would be integrated into popular Facebook applications like WhatsApp and Messenger.
The European Commission is also keeping an eye on other developments in the cryptocurrency payments space. With the advent of corporate money through Libra, regulators may fear more plans to launch similar projects from existing companies with huge user bases.
Libra Challenges Monopoly on Money
Bitcoin has existed for 10 years now, but central banks and securities regulators are only just waking up to it. This is because the user base has been limited to those who value censorship resistance, a degree of anonymity, and money unaffected by monetary manipulation from authorities.
Libra poses a very different problem. It has the potential to become global money and challenges the central bank’s monopoly on money. Never before has a private company decided to launch a currency, let alone one that would bring a uniform currency to the entire world.
At the end of the day, the choice would be between central banks that are drunk on power and Facebook – a company that wants to sell all your data to every merchant in the universe.