German blockchain strategy fires warning shot at Facebook’s Libra project
The German federal government has passed a new blockchain strategy this week and fired a shot across the bows of Facebook and its Libra project by declaring that it would fight any efforts by corporations to establish parallel currencies in the country.
In the strategy document published by the Ministry for Finance and Ministry for Energy and Economy on 18 September, the government outlines how it plans to work closely with European and international allies to prevent corporate-backed stablecoins like Libra from becoming alternative currencies.
German government plans to propose legislation which will introduce blockchain-based electronic bonds
“We want to be in the forefront and further strengthen Germany as a leading technology hub,” says federal finance minister Olaf Scholtz. “Blockchain technology can contribute to this. It is a building block for the future of the internet.
“At the same time, we must protect consumers and state sovereignty. A core element of state sovereignty is the issuing of currency, we will not leave that up to private companies.”
It added that discussions between the government and the Bundesbank would be intensified about the potential of a digitally-issued central bank-backed national currency.
US social media giant Facebook caused a stir in the regulatory community when it announced the development of its new Libra back in June.
According to its developmental whitepaper, Libra will be backed by a not-for-profit company called the Libra Association, which will manage a reserve consisting of a basket of currencies. So far the US dollar, pound sterling, euro and yen have been earmarked.
European Central Bank board member Francois Villeroy de Galhau said on Tuesday that Libra would face a tough regulatory response due to the fact that it has highlighted gaps in many country’s oversight regimes.
Federal Minister of Economics, Peter Altmaier, adds that the potential for blockchain remains high. “Germany is one of the world’s leading locations,” he says. “With the blockchain strategy we want to contribute to maintaining and expanding this lead.”
Later in the document the German government outlines how it plans to propose legislation which will see the introduction of blockchain-based electronic bonds.
