Germany Joins France In Pushing Back Against Facebook's Libra

France and Germany have both agreed to block Facebook’s Libra cryptocurrency.

German parliamentarian Thomas Heilmann said the German government will block projects like Libra, which aligns with France's stance.

In a joint statement, the two governments affirmed that “no private entity can claim monetary power, which is inherent to the sovereignty of nations,” according to Reuters.

Finance Minister Olaf Scholz said a core element of state sovereignty is the issuance of a currency, Bloomberg reported: "We will not allow private companies to do it."

'Build A Better Version Of Digital Cash'

The news is not going over well with the blockchain and crypto community.

“Instead of trying to ban Libra with increased legislation, Germany and Europe as a whole should build a better version of digital cash using blockchain. If the European Central Bank was to issue a central bank-issued digital currency in the form of a euro token on a public blockchain such as Ethereum, it would eclipse Libra and dwarf its current mass market appeal and unique perceived benefit,” says Florian Glatz, co-founder of Fundament, a security issuance solution for asset tokenization based in Germany.

While Heilmann is targeting his comment at Libra specifically, it does not hold water for other crypto assets, Glatz said.

"Contrary to Heilmann’s statement, the German government has proven with its blockchain strategy to be very supportive of German companies in the space and encouraging innovation and investment in the blockchain ecosystem."

Give Libra A Chance?

One commentator said little is known about Libra.

“Regulators are fearful as its exact characteristics are unknown, so they make statements that they plan to ban it. Germany, and France before it, are speaking prematurely,” said Christophe De Courson, CEO of Olymp Capital.

Regulators are also concerned about Libra because it has the potential to “revolutionize the European monetary system” across the continent, De Courson said.

"The reality is that Libra could be of benefit to an enormous number of European residents. Europe’s growing immigrant communities could take advantage of free international remittances, rather than relying on American companies such as The Western Union Company WU, which take large percentages of transactions in commission."

Many questions are left unanswered in Heilmann's statement that the government will not allow Libra and other projects in Germany, the CEO said.

“Heilmann, much like Le Maire in France, has given no indication of how exactly Germany plans to ban Libra. Would a Libra ban entail a ban of Facebook, Inc. FB and Whatsapp? Germany, particularly Berlin, is a tech hub in Europe, in which blockchain and crypto projects thrive. What would this measure mean for those companies and that booming industry?”

In order for digital currencies to develop in Europe, sustainable and supportive regulation is needed that allows the "next generation of finance to flourish" and allows Europeans to participate in decentralized finance, he said.