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Germany’s Finance Chief Joins Slew of Financial Leaders Scoffing at Libra

Last Updated March 4, 2021 2:38 PM
Aaron Weaver
Last Updated March 4, 2021 2:38 PM

Germany joined the chorus of countries offering stiff resistance to Libra, Facebook’s new digital coin. German Finance Minister, Olaf Scholz, expressed concerns about the coin’s consumer privacy issues and potential for disruption.

Reuter’s released a report  which quoted him saying, 

“The issuance of a currency does not belong in the hands of a private company because this is a core element of state sovereignty.”

“The euro is and remains the only legal means of payment in the euro area.”

Germany Is Not the Only Country Reluctant on Libra

The quote was taken just days before Germany attends the G7 Summit. The summit will feature several countries that have publicly questioned Facebook’s new development. In fact, France is now forming a cryptocurrency task force comprised of G7 member countries. The task force will try to ensure the proper regulation of digital currencies. 

It’s no coincidence that France formed the task force during the height of the Libra circus. Just hours after Facebook unveiled its new coin, French Finance Minister Bruno Le Maire took to the radio waves to say that Libra becoming a sovereign currency “must not happen.”

In June, Banque of France governer, Francois Villeroy de Galhau, stressed his want for regulation around emerging digital currencies. He said,

“We want to combine being open to innovation with firmness on regulation. This is in everyone’s interest.”

The UK has similar interests. The governor of the Bank of England, Mark Carney, has requested the “highest standards of regulations.” 

Facebook Already Loses India

If that wasn’t enough, Facebook has already pulled Libra from its second-largest market, India. India’s Economic Affairs Secretary Subhash Garg hinted that India’s cold stance on cryptocurrency would not change for Libra. 

Garg stated, 

“Design of the Facebook currency has not been fully explained. But whatever it is, it would be a private cryptocurrency and that’s not something we have been comfortable with.”

Even crypto-friendly Japan has mixed feelings about Libra’s potential disruption. According to Nikkei Asian Review , the Bank of Japan is worried the coin will be “piggybacking” off the structure of existing financial systems while, at the same time, posing a threat to them. 

A BOJ official noted that the coin would be more difficult to regulate than other digital currencies. He said, 

“It will move money into an absolutely virtual world, so it is completely different than other forms of digital payment.” 

The Harshest Critiques Come From Home

While Facebook is taking a backlash from a diverse selection of countries, the harshest criticisms of all may reside in its homeland. American tech entrepreneur Mark Cuban has said that Libra is a “big mistake.” President Donald Trump said that Libra “will have little standing or dependability.” 

Meanwhile, the House Financial Services Committee demanded that Facebook pause its development of Libra. Add to that, house Democrats are drafting a bill that could ban big tech from finance.  

Even crypto enthusiasts have taken a negative stance on Libra. 

Crypto hero/ maniac John McAfee recently tweeted that the currency is a “grotesque distortion” of the intent behind cryptocurrencies. 

Whether it’s from France, the U.S., or Germany, Libra will have plenty of hurdles to overcome. It’s tough to separate whether these voices of dissent are so loud because they’re looking to protect us or protect themselves from a new competitor. If the last few weeks have shown us anything, it’s that we will have plenty of time to sort through it before the coin is released.