Germany adds to Facebook’s woes by voicing opposition to its Libra cryptocurrency
- While the development of blockchain technology holds great potential, it should not be used to develop private forms of money such as Libra, Berlin said
“A core element of state sovereignty is the issuance of a currency, we will not allow private companies to do it,” Finance Minister Olaf Scholz said in an emailed statement following the decision.
“Europe already has enough trouble keeping its own currency stable,” said Patrick Heusser, senior trader at digital assets brokerage firm Crypto Broker AG in Zurich. “Euro-area governments see stablecoins like Libra as a big threat to the stability of the euro because the economically weaker countries in the euro area might have some citizens who believe that it is better to have their money in a stablecoin.”
European Central Bank policymaker Benoit Coeure on Tuesday backed Bank of England Governor Mark Carney’s call for work on an international central-bank digital currency, saying that private stablecoins could challenge the global primacy of the dollar.
Among regulators’ other questions is that the new digital currency will be used by smugglers, drug dealers and terrorists. Another is that the social media giant, which has run afoul of regulators over user data in the past, should not be trusted to handle sensitive financial information. Facebook has said repeatedly it would be just one of many companies managing the new currency.