While the Bundesbank is cautious about Facebook’s new cryptocurrency initiative, it seems slightly more supportive of the idea than other countries’ financial institutions.
The Bundesbank made the statement in its monthly report. In it, the Bundesbank suggested that it is difficult to say what kind of regulatory and financial framework would be needed regarding Libra as most things about the currency is still speculative. While the bank encouraged “supervisory bodies and central banks” to pay close attention to how things develop, it also noted that innovations “that increase wealth and reduce transaction costs should be supported” is financial stability and payment security were not compromised, according to Bloomberg.
This has been seen by some analysts that the German central bank is slightly more optimistic, albeit still cautious, regarding the Libra Consortium than what its fellow institutions in other countries are.
For instance, Bruno Le Maire, France’s finance minister, said Libra raised questions regarding the funding of terrorism and money laundering. He told CNBC, the news site, that countries like France, the United States and Italy all have their own currencies but that they “are sticking to some very strong commitments, some very strong rules.”
Le Maire added, “We cannot accept a new currency having the exact same kind of power without the same kind of rules, without the same kind of commitments and without the same kind of obligations.”
Benoit Coeure is a board member of the European Central Bank and chairs its international working group on Libra. He recently told Reuters, the news agency, that Libra won’t happen until regulators are satisfied that Facebook has minimized every risk about it. ““Authorities are not going to let any such projects happen before we have answers to our questions and before we have the right regulatory framework,” he said.
Similar concerns have also been raised in the United States. Steven Mnuchin, the US treasury secretary, has said Facebook has “a lot of work to do” before the country’s government allows it to go ahead with issuing Libra.
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