Facebook Libra dealt another blow as Germany reveals blockchain strategy

Getting your Trinity Audio player ready...

Facebook’s Libra has made no secret of its intention to roll out globally, ideally with the support of local regulators worldwide. But its prospects in the European Union (EU) were dealt another blow today with the unveiling of Germany’s new comprehensive blockchain strategy, alongside a vow to fight back against any attempts to launch a “parallel currency” within its jurisdiction, Reuters reported.

In measures given the green light by lawmakers on Wednesday, the government set out its strategy for the digital transformation of the German economy, including new strategies for tackling the risks from new, emerging technologies.

Describing blockchain as the building blocks of the future Internet, Finance Minister Olaf Scholz said the measures were about making Germany a leading global destination for blockchain innovation.

We want to be at the forefront and further strengthen Germany as a leading technology location. At the same time, we must protect consumers and state sovereignty. A core element of state sovereignty is the issuing of a currency, we will not leave this task to private companies.

The comments have been as a reference to Facebook and Libra’s ongoing efforts to win the approval of regulators and lawmakers across Europe. It chimes with similar views expressed by politicians in France, with French Minister Bruno Le Maire equally determined in his opposition to the stablecoin.

Per the blockchain strategy, Germany intends to work closely with European partners in ensuring stablecoins like Libra cannot grow to become alternatives to fiat, citing risks to the traditional financial system from an effectively-privatized currency.

The strategy will see the government working closely with the Bundesbank in identifying and tackling the risks arising from cryptocurrency, and from stablecoins like Libra.

The measures also include plans for electronic bonds to be issued on blockchain, as well as proposals for an alternative public cryptocurrency for Europe – a project which would make stablecoins like Libra redundant within the bloc.

The criticisms of Libra are only the latest roadblock for Libra, which has thus far met with stiff opposition in Europe, the United States and beyond. With regulators worldwide pledging to take a tough line against the stablecoin, it looks like Facebook could have significant challenges to overcome in order to realize its ambitions for its digital currency.