Germany adds to Facebook’s woes by voicing opposition to its Libra cryptocurrency

While the development of blockchain technology holds great potential, it should not be used to develop private forms of money such as Libra, Berlin said

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Published: 8:07pm, 18 Sep 2019Updated: 10:05pm, 18 Sep 2019

Germany has delivered a fresh blow against Facebook’s planned cryptocurrency, expanding Europe’s opposition to the social network’s financial ambitions.

While the development of blockchain technology holds great potential, it should not be used to develop private forms of money, the government in Berlin said after the cabinet approved its new blockchain strategy.

“A core element of state sovereignty is the issuance of a currency, we will not allow private companies to do it,” Finance Minister Olaf Scholz said in an emailed statement following the decision.

The criticism from Germany, Europe’s biggest economy, echoes France’s view and scepticism from Washington. Facebook has launched a public-relations offensive that has sought to put policymakers at ease.

Olaf Scholz, Germany’s finance minister. Photo: DPA

A key concern from some regulators is that Facebook’s ambition would threaten a core government function: monetary policy. The response from central banks has varied from active engagement as in the case of Singapore, to China considering its own equivalent.