Following on from China and Facebook: does Germany think it’s time for a digital euro?

Following on from China and Facebook does Germany think it's time for a digital euro

Olaf Scholz favors the digitization of our currency the euro. This is not just anyone, since last year Scholz has been Vice Chancellor and German Federal Minister of Finance in the Merkel IV Cabinet.

Europe must be ahead of China, Russia, US and Facebook

“Such a payment system would be good for Europe’s financial heart and the integration of the euro into the global financial system,” said Scholz. He said this late last week and the German WiWo (WirtschaftsWoche) wrote about this.

“We should not leave this fight to China, Russia, the US or other private providers,” Scholz added. With private providers he can mean multiple parties, but it seems that he is referring to Libra, the stablecoin of Facebook.

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Own digital currency, no private currency

Last month the German government shared their blockchain and crypto plans. The aim is to prevent that currencies other than fiat are issued in Germany. This too seems like a response to Facebook’s Libra.

Reuters reported that the German Chancellor Angela Merkel’s cabinet is in favor of this strategy. Although the government is in favor of the digital transformation of their economy, it is against private companies that issue digital currencies.

“We want to lead the way and further strengthen Germany as a leading technological country. At the same time, we must protect consumers and state sovereignty, “said Scholz. “A key element of the sovereignty of the state is the issuance of a currency, we will not leave this task to private companies.”

Germany is not alone

German officials are not the only ones who speak out against Libra. They previously held a joint press conference with the French. French Finance Minister Bruno Le Maire then said that Facebook’s new cryptocurrency cannot be used in Europe. Certainly not if concerns remain about the sovereignty of the currency and ongoing financial risks.

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European Central Bank board member Benoît Coeuré said last month that stablecoins give rise to “serious risks”. Libra is a “wake-up call,” he said, adding, “We need to think about a digital central bank currency.”

US and China also want to participate

The idea of ​​having your own digital currency is not new. Last week, a request was made via the US official route whether the US Central Bank (FED) would like to investigate the feasibility of a national digital dollar.

China seems to be ready for it. In theory, their digital currency can already be distributed next month.

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