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German Vice Chancellor Declares Facebook’s Libra Will Never Become Alternative Currency

German Vice Chancellor, Olaf Scholz, has definitively stated that governments and regulators cannot allow stablecoins like Facebook’s Libra to become a parallel currency. 

Scholz, who is also Germany’s Finance Minister, revealed in a recent panel discussion in Berlin that Facebook’s cryptocurrency project will be soundly rejected. He also stated that Berlin “cannot accept a parallel currency.” 

Report from Reuters

Reuters reported that a document they saw showed that Germany’s policymakers are collaborating closely with their European counterparts and international partners to ensure that stablecoins won’t become substitutes for traditional or official currencies. 

Mark Zuckerberg’s latest project is receiving the bulk of the scrutiny because Libra is admittedly the most famous of the stablecoins. This type of cryptocurrency is supported by assets like gold, short-term government securities, and conventional money deposits.

Berlin is said to also be intensifying its discussions with the country’s national central bank, Bundesbank, about the funds in its digital central bank and explore the technological developments currently being introduced and face the potential risks. 

Blockchain-Powered Electronic Bonds

The document is also said to have shown that Germany is planning to introduce legislation that will allow the establishment of blockchain-powered electronic bonds. 

It’s not the first time that Germany’s federal government has spoken out against the social media giant’s stablecoin project. 

Thomas Heilmann, a member of the German Parliament, said on Sept. 13 that they will stonewall any projects like the Libra. He claimed that his government won’t consider granting access to any market-centered private stablecoins. 

The German government is expected to endorse an extensive blockchain strategy that aims to push forward the digital transformation of the country’s economy. It will reportedly address the dangers that new technologies will create. 

Meanwhile, Calibra head David Marcus was hard at work trying to alleviate concerns that Libra is a threat to the world’s financial system. 

A meeting was just held in Basel, Switzerland between the founders of Libra and 26 international central banks to talk about digital currencies. The event was organized under the auspices of the Bank for International Settlements (BIS). Economist Benoit Coeure led the discussions. 

Marcus pointed out during discussions that Facebook’s proposed stablecoin is not meant to be a new currency. He said the project’s goal is to develop an improved payment system that will run on top of today’s currencies and provide more value to users around the world. 

Marcus also insisted that no new money is being created and that it will remain strictly in “the province of sovereign Nations.”

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