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Germany’s Scholz: We cannot accept parallel currencies such as Facebook’s Libra

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Facebook’s planned Libra is the most well-known of the stablecoins, a certain form of cryptocurrency backed by assets such as traditional money deposits, short-term government securities or gold.

“We cannot accept a parallel currency,” Scholz said during a panel discussion in Berlin. “You have to reject that clearly.”

The German cabinet is expected to adopt a comprehensive blockchain strategy on Wednesday which aims to boost the digital transformation of its economy but also tackle the risks stemming from such new technologies.

In its blockchain strategy, Berlin says it will liaise closely with its European and international allies to prevent stablecoins from becoming alternative currencies, according to a government document seen by Reuters.

“The Federal Government will work at European and international level to ensure that stablecoins will not become an alternative to official currencies,” the document said.

Berlin will intensify its existing dialogue with the Bundesbank, Germany’s national central bank, about digital central bank money in order to explore the current state of developments and address possible risks, the document said.

The German government also aims to propose legislation this year which would allow the introduction of blockchain-based electronic bonds, the document showed.

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