Bundesbank warns against Libra

Bundesbank warns against Libra

Crypto coins like Libra – the Facebook Inc.’s newly proposed digital token, deserve special attention by central banks and supervisors, Bundesbank said in a statement.

Such projects might have a “sustainable and significant effect” on the financial system and the central banks, the institution said in its monthly report on Monday.

“So far, important technical, organizational and regulatory questions about the proceedings of the Libra consortium are still open. Considerations of the potential effects are therefore speculative. At the same time, it seems appropriate that supervisory bodies and central banks closely watch and asses the plans. Innovations that increase wealth and reduce transaction costs should be supported. But important goals like monetary and financial stability and payment security must not be compromised”, Bundesbank noted.

Last week French finance minister Bruno Le Maire said at а G7 meeting that a private company should not “have the possibility to create a sovereign currency.”

Also last week the UK finance minister Philip Hammond said he wished regulators to have a say as to how Libra will fit in the regulatory frame work of the country.

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