The German Finance Minister, Olaf Scholz has made it clear that the German government would not accept any parallel currencies such as Facebook’s Libra cryptocurrency. The Euro is and will remain the primary and only currency to be used in Germany. The news came on 17th September when Reuters reported on a panel discussion in Berlin, to discuss the potential impact of Facebook’s Libra.
Libra ‘Not’ Acceptable
Headed by the German Minister and Vice-Chancellor, Olaf Scholz, the panel consisted of prominent members of the German government along with other prominent financial figures in Germany. During the discussion Scholz said:
We cannot accept a parallel currency. […] You have to reject that clearly.
Reuters also received a document that was circulated in the discussion. In the document it was made clear that German banks and the government are working closely with the European authorities to cater this problem. The EU and the European Central Bank have already came out against the idea of Facebook having its own stablecoin, pegged to several other fiat currencies including USD, Pound, Yen and others. The document stated:
The Federal Government will work at European and international level to ensure that stablecoins will not become an alternative to official currencies
This is not the first time the German government has spoken against crypto and said that the government will block any attempts made by Facebook to launch Libra in Germany. German Parliamentarian Thomas Heilman, stated last week that the government will block the project and won’t let stablecoins disrupt the stability that the government has created.
Heilman was of the view that the government has worked hard to create the stability in the economy and these stablecoins will disrupt the system. He said:
Up to now, the economy has done a great job in countering crises and inflation with measures taken by central banks. Once a digital currency provider dominates the market, it will be quite difficult for competitors.
German government has assured the press that the government is in talks with Bundesbank, Germany’s national bank over the alternatives which the government can propose. Bundesbank is currently assessing the possibilities of digital central bank-issued money and exploring the possible risks of the move.
The document received by Reuters also stated that the German government is also working on blockchain-based electronic bonds to be circulated this year. Showing that the government is not anti-blockchain or crypto however, they do seem to want more control over the currency being circulated.
Calibra CEO Libra Defence
A few days earlier Facebook was also being discussed in Basel, where the head of 26 different countries met on 15th September to discuss Libra with Facebook’s representatives. While people had their doubts, the CEO of Calibra, the digital wallet for Libra, David Marcus wrote a twitter thread, explaining how Libra is not a threat to sovereign currencies and how it is not creating any new money. He said:
Libra is designed to be a better payment network and system running on top of existing currencies, and delivering meaningful value to consumers all around the world … there’s no new money creation, which will strictly remain the province of sovereign Nations.