German Finance Minister Likes Digital Money, But Not Libra

The Finance Minister of Germany has stated that he supports the digitalization of the Euro, but is completely against the Libra due to existing issues with the project as well as the idea of privatizing currency issuance. According to a recent interview with Wirtschafts Woche, a German news outlet, Minister Olaf SCHOLZ praised the idea of making an e-Euro in the wake of an economy that is starting to go beyond borders and even hemispheres.

According to Scholz’s comments, having a digital currency that is wholly accepted in the European Union, will not only simplify internal trade relations but external as well. As we all know, recent years have been quite tough on the global economy, and anything will be welcome to somehow alleviate the pain.

Why doesn’t anybody like Libra?

In order to understand the aversion towards Libra, we need to look into the very core of what makes a state a state. This is the dominance over the law, international relations, as well as some, say in the local economy. That “small say” in the local economy is guaranteed through the control and monopoly on the issuance of currency. The national treasuries and finance ministries have the tools at their disposal to somehow manipulate or budge the exchange rate if it gets out of hand.

In terms of Libra, the idea of issuing currencies will be in the hands of a for-profit organization, thus leading politicians to believe that it will not be in the best interest of the users. Overall, the governance of the currency will be lost, thus leaving the governments all over the world with just law in their hands.

Image courtesy of Financial Times