The cryptocurrency launched by the social network has attracted the wrath of states and regulators around the world. To the point that we begin to doubt that it will see the light of day. It is little to say that we knew more euphoric launch. On October 14, the consortium of companies carrying libra, the now famous global cryptocurrency imagined by Facebook, officially met for the first time in Geneva. A small sauterie that was, symbolically, to lay the first stone of this ambitious project unveiled with great fanfare in the spring. Yes, but here it is: in just fifteen days, this digital currency supposed to revolutionize payment has seriously taken lead in the wing. Already blithely pounded by the public authorities, she is now let go by her supporters from the beginning. The shattering defections of the giants Booking and eBay, and, even worse, of PayPal, Visa and Mastercard – three heavyweights in the world of finance on which Facebook relied to give credibility to its project – have calmed everyone. Members who have not left, such as Uber, Iliad or Spotify, are in their little shoes and did not wish to respond to our requests. Only the very liberal and technophile Xavier Niel still dares to afford a pro-libra platform in Les Echos... Faced with the adverse winds blowing from all continents, the Libra association – which refused to receive L'Express in its Geneva premises – is already planning to delay the launch of the currency, initially scheduled for the second half of 2020. "At the scale of a project like this, postponing a few quarters will not cause us problems," tried to minimize the Frenchman Bertrand Perez, former employee of PayPal and secretary general of the Libra association. But no one is fooled. What happened? How could such a promising and ambitious project go from the Capitol to the Tarpeian Rock in such a short time? At first glance, libra, which borrows its name from the Roman pound and the zodiac sign of Libra, has indeed everything to please. For starters, this currency would make it possible to transfer money to an acquaintance on the other side of the world as easily as being sent a photo with WhatsApp or Messenger. The consortium, which includes NGOs such as the solidarity microcredit platform Kiva, also defends the interest of its innovation for those excluded from the banking system. But also for the inhabitants of unstable countries subject to hyperinflation, like today Venezuela or Zimbabwe. Above all, thanks to libra, emigrants could send money to the country at no cost, rather than going through rapacious intermediaries like Western Union. Real-time, frictionless payments, what are the people asking for? What happened? How could such a promising and ambitious project go from the Capitol to the Tarpeian Rock in such a short time? At first glance, libra, which borrows its name from the Roman pound and the zodiac sign of Libra, has indeed everything to please. For starters, this currency would make it possible to transfer money to an acquaintance on the other side of the world as easily as being sent a photo with WhatsApp or Messenger. The consortium, which includes NGOs such as the solidarity microcredit platform Kiva, also defends the interest of its innovation for those excluded from the banking system. But also for the inhabitants of unstable countries subject to hyperinflation, like today Venezuela or Zimbabwe. Above all, thanks to libra, emigrants could send money to the country at no cost, rather than going through rapacious intermediaries like Western Union. Real-time, frictionless payments, what are the people asking for?

CRITICIZED FROM THE UNITED STATES TO EUROPE

And yet, this supranational currency has caused an unprecedented stir from Washington to Beijing via Delhi, Paris and Berlin. China, which is working on its own cryptocurrency project, immediately indicated that it would not allow it on its territory. And yet this supranational currency has caused an unprecedented stir from Washington to Beijing via Delhi, Paris and Berlin. China, which is working on its own cryptocurrency project, immediately indicated that it would not allow it on its territory. Admittedly, this did not surprise anyone while Facebook and its WhatsApp satellite are already banned there (the Chinese use a VPN to access it). But even in his native Country, the United States, the returns are not enthusiastic. At a hearing in Washington last July, U.S. senators riddled with criticism David Marcus, the former chairman of PayPal who now leads the Libra project at Facebook. And, after having asked for a moratorium on the social network and its partners, the elected representatives of the US Congress should receive on October 23 Mark Zuckerberg, the CEO of the famous social network. Europe, too, is showing its fangs. "We do not know the intentions of the consortium, but we are already seeing problematic points emerging in terms of competition, data protection and money laundering," says a technocrat from the Commission. More incisive, the French Minister of the Economy, Bruno Le Maire, castigates "the libertarian ideology that refuses any regulation and contests any role for the state", and is alarmed by a "danger for consumers". "Monetary power is the responsibility of the sovereignty of nations, not of any private entity," the France and Germany said in a joint statement in Helsinki on September 13. Atmosphere. Primarily concerned by the emergence of a digital currency competing with the dollar, the pound and the euro, regulators are particularly feverish. In mid-September, no less than 26 central banks travelled to Basel to meet with Libra representatives. Never seen before. It must be said that the authorities fear that a good part of the financial flows will escape their radar. Not to mention the potential impact of a digital currency failure on the financial system – in the dark scenario where a panic movement would cause all holders to resell their libras at the same time. In fact, with their user base of 2.7 billion people, the Facebook galaxy and its messenger ships Messenger, WhatsApp and Instagram would quickly make libra a too big to fail player, and it would be up to central banks to rescue the network in case of a problem, just as they saved the banks during the 2008 financial crisis. Which does not excite them. The European Central Bank has also been very clear. "The bar will be set very high for regulatory approval," warned Frenchman Benoît Coeuré, a member of the ECB's Executive Board. "It is also a question of democracy, not just an economic issue," said Bruno LeMaire, at the end of the G7 Finance held last week in Washington under the French presidency. David Marcus, anxious to show white paw, assured that the new virtual currency would be launched only once it complies with international regulations.

DATA PROTECTION

This is a sensitive point, because monetary policy is a matter for the sovereignty of nations, through central banks. Although theoretically independent, the latter have close ties with governments, as illustrated by Donald Trump's pressure on the Federal Reserve to lower its key rates. On the other hand, can we imagine for a moment that Uncle Sam lets the dollar, his main negotiating lever on the international scene, compete with a new currency beyond his control? The U.S. Department of Justice can indeed take up all the cases where the transactions were carried out in dollars, and sanction any company in the world. BNP Paribas had to pay a fine of 8 billion euros for violating the US embargo against Cuba, Iran and Sudan. And we must not forget the issue of data protection either. Case after case, Facebook has lost all credibility in its ability to protect its users' personal information. The Cambridge Analytica scandal is still on everyone's mind. The social network assures that it will not have access to the data of its entity Calibra, the one that designs the digital wallet used to store and use the libras. The Menlo Park group would therefore build a Chinese wall between this tool directly integrated into Messenger, WhatsApp and Instagram and the other subsidiaries, but we can seriously doubt its waterproofness. For the temptation will be great. Imagine that in addition to your likes and shares, Facebook analyzes your purchases. The social network will then know everything about your likes and dislikes, and will be able to offer advertisers even better targeted advertisements, sold at a golden price. This will only aggravate its quasi-monopoly on online advertising (with Google). "The race for data is now through payment. In this sense, Facebook is only imitating the Chinese Alibaba, with Alipay, and Tencent, with WeChat Pay," said Julien Maldonato, a partner at Deloitte. The future may be emerging in China, where half of in-store payments are made via these two apps. It is therefore not absurd to imagine that, in ten years, the currency developed by Facebook will become the preferred means of payment for Western consumers. But even in this case, should we give in to panic? "Libra is a solid and frictionless instant payment system, no more and no less," minimizes the Libra association contacted by L'Express. Above all, unlike bitcoin, ether and other cryptocurrencies, the digital currency is not built from scratch. It will be pegged to a basket of traditional currencies: 50% dollars, 18% euros, 14% yen, 11% pounds sterling and 7% Singapore dollars. For each libra issued, Facebook will therefore have to keep in reserve a unit of this basket of currencies. "This will not make official currencies disappear, it simply accelerates the digitalization of payments – just like PayPal or Lydia, but on a potentially much higher scale," summarizes Nathalie Janson, professor of economics at Neoma Business School, cryptocurrency specialist.

ZUCKERBERG VICTIM OF HIS HUBRIS?

Before making a transaction, users will have to transfer money from their bank account to their Libra account." So there is no money creation, at least as long as Libra does not sell credit services," explains François Meunier, Professor of Finance at ENSAE Paris. "The Bank of China requires Alipay and WeChat to place 100% of their reserves with it in order to control them. The ECB and the Fed could proceed in the same way," the economist continues. As for the charge of promoting illicit activities or organized crime, they do not hold water. The Calibra wallet is registered with the U.S. regulator and has already obtained licenses in eight U.S. states. "The blockchain planned by Libra is not completely anonymous, Calibra will be able to trace the flows if necessary to identify fraudulent transactions," says Nathalie Janson. In the end, Facebook's big mistake will certainly have been to create a new currency rather than settle for a payment feature internal to its ecosystem (as WeChat did). "There is a kind of recklessness and even arrogance on the part of Facebook here, even as a growing number of people, including Democratic candidates for the 2020 presidential election, are demanding its dismantling," Meunier said. Is Mark Zuckerberg a victim of his hubris? Will he paradoxically precipitate the dismemberment of his own society? Or, more slyly, did he launch Libra to divert attention? To panic the regulators by announcing a supranational currency, to be criticized, to backtrack, to introduce a simple payment function, which passes like a letter in the mail, and ultimately to invade our lives a little more? Cynics will appreciate. T. L.