Germany Joins France in Blocking Libra’s Development in Europe

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Facebook's ambitious cryptocurrency project continues to face huge hurdles in its development and hopes of launching in the second half of 2020 with yet another major European nation putting its foot down. 

Germany now joins France, the USA, China and India, who have all expressed distrust and an active anti-Libra sentiment. The major Eurpean nation has approved a blockchain strategy that aims to prevent stablecoins from becoming alternative currencies and threatening state sovereignty.

It joins its close European ally, France, who said last week that it too will not allow for the advancement and growth of Libra in Europe. For both France and Germany the reasoning for their blockade of the cryptocurrency is in order to not allow a private company like Facebook to enact a sovereign currency.

However, Facebook’s David Marcus, the former PayPal executive, who now serves as one of the lead developers of Facebook’s Libra project, has defended his project by saying it poses no threat to the sovereignty of other nation;s currencies.

Even with these assurance,there continues to be more hurdles and blockades going up in Facebook’s way as they attempt to launch this cryptocurrency. Yet, while the private company faces issues, both France and Germany have also expressed that they are looking to the blockchain for their own tokenized digital assets. 

A government strategy

Chancellor Angela Merkel’s cabinet passed their strategy less than a week after France’s finance minister Bruno Le Maire made his comments. The strategy is an obvious bid to mitigate the risks posed by the Libra cryptocurrency from Facebook.

We want to be at the forefront and further strengthen Germany as a leading technology location,” Finance Minister Olaf Scholz said, adding that blockchain technology could contribute to this as it was a building block of the future Internet.

“At the same time, we must protect consumers and state sovereignty,” Scholz said. “A core element of state sovereignty is the issuing of a currency, we will not leave this task to private companies.”

The direct aim is being taken at stablecoins that are being created, however, it is thinly veiled that it is because of Facebook's Libra that this has passed. More so, the French have even suggested the launch of a stablecoin-like ‘EuroCoin’ which would seemingly not be blocked by the Germans. 

Digital bonds

In fact, Germany have shown their hand by aiming to propose legislation this year which would allow the introduction of blockchain-based electronic bonds. Thus, there does not seem to be any issue arising from Germany surrounding the use of blockchain tokenization, rather the concern is that Facebook wants to take the lead. 

Countries and even banks are quickly climbing on the bandwagon with China close to launching its digital Yuan, and even banks like JP Morgan, and Wells Fargo, also looking to launch their own stablecoins. 

The new offering from Wells Fargo follows in a similar vein to the JPMorgan coin and could indicate that an arms race may be developing between banks and governments to corner the market. 

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