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German Regulators Worried About Libra: They May Not Allow It To Compete With The Euro

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Libra has been one of the most debated topics during the last weeks. Many regulatory agencies have been already raising concerns about it and the German Finance Minister has also given his opinion about it. According to a recent article released by Reuters, Olaf Scholz said that they should not allow it to threaten financial stability and consumer privacy. 

German Regulator Worried About Libra

Facebook announced on June 18 its cryptocurrency project called Libra. This is a digital currency that is expected to be used by individuals as a means of payment and to process transactions. 

There are several regulatory agencies around the world that are worried about the impact that this virtual currency could have on the market. This is why Mr. Scholz explained that the euro is and remains the only legal means of payment in the euro area. 

“The issuance of a currency does not belong in the hands of a private company because this is a core element of state sovereignty,” commented Mr. Scholz before the G7 summit that is going to be held in France later this week. 

In addition to it, France’s finance minister Bruno Le Maire said that Libra is not going to become a sovereign currency. “It can’t and it must not happen,” he commented. This shows that regulators are worried about the effects this digital currency can have on the economy and on their currencies. 

A few hours ago, David Marcus, the head of Facebook’s crypto project, defended Libra during a Senate Banking Committee hearing. One of the things Marcus said is that they are going in order to be working on Anti-Money Laundering policies. 

There have been other critics from U.S. officials such as what Steven Mnuchin, the secretary of the treasury, that said that cryptocurrencies have been used to support billions of dollars of illicit activity. 

We have also written a few hours ago that Brad Garlinghouse said that virtual currencies, including Libra, are not expected to be replacing Libra, at least in the coming years. 

This shows that there might be harder regulations proposed by authorities if they exaggerate the negative sides of Libra

“I hope there is no ‘ignoring, laughing or fighting’ as it is related to the regulation of crypto,” Garlinghouse wrote. “If we want to maximize progress forward, it’s about working with the existing financial system – not against it.” 

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