German Finance MInister: Libra Should Not Be Allowed To Become A Sovereign Currency
German Finance minister has joined the bandwagon of the people afraid or concerned about Facebook’s planned cryptocurrency, Libra.
The German finance head, Olaf Scholz has echoed other public officials who have called on regulators across the world to critically examine the Libra project, Reuters reports. The minister said that regulators should be keen to ensure that Libra does not disrupt financial stability as well as consumer privacy.
In a meeting with France officials ahead of the G7 meeting that will be held later this week, Scholz said:
“The issuance of a currency does not belong in the hands of a private company because this is a core element of state sovereignty.”
Scholz stressed that the Euro should remain as the only payment system within the eurozone.
“The euro is and remains the only legal means of payment in the euro area,”
According to the minister, Germany was coordinating its efforts with its international allies to make sure that there is financial stability in the world, enhance consumer protection and avert any forms of money laundering and financing of terrorism activities.
Scholz’s statement is in tandem with his French counterpart Bruno Le Maire who said that Libra should not be permitted to become a sovereign currency. He said:
“It is out of question that Libra be allowed to become a sovereign currency, it can’t and it must not happen.”
Scholz said that the development and growth of cryptocurrencies may make it hard for states to manage their economies using monetary or fiscal policies.
Since its announcement, Libra has raised lots of concerns from policymakers and lawmakers and in June, Markus Ferber, a member of the European Parliament, said that there was a need for the regulators to move with speed and analyze the project to stop Facebook from operating like a shadow bank.
Similarly, various members of the EU Central Bank have called for a speedier effort to come up with regulations that will guide the Libra project before it is too late for the regulators.
Germany and France are leading other G7 nations in coming up with a uniform international regulatory framework to deal with Libra and other related projects. According to Scholz, a task force has already been formed to look at these aspects.
As the policymakers raise their concerns in Europe, CoinDesk reports that the US Senate Banking Committee is set to have a hearing about Facebook’s latest exploration in the crypto sphere.
For its part, Facebook has stressed it will halt the launching of the cryptocurrency until all the regulatory concerns are dealt with.
Do you believe that Facebook’s Libra is a threat to the sovereignty of states? Share your thoughts with us in the comments section.