German Central Bank Chief Remains Negative On Libra

The somewhat negative attitude from institutions towards Libra is again shown in the statement of the German Central Bank Chief Jens Weidmann, stating that they should drop the pace of the regulation. He also mentioned that the banks must work on improving their payment systems and that the EU should be more careful in regard to the e-euro as we are reading further in the libra news.

The world had its attention set toward stablecoins from the announcement of the stablecoin named Libra, created by Facebook. There were also rumors that the European Union was among the establishment forces that consider launching similar products, which at the time was thought as a direct attack against Libra.

Jens Weidmann, the German Central Bank chief is the latest to voice the potential unifying European digital coin. According to a certain report, he is of the opinion that the EU should be more cautious about the potential launch of the e-euro. He also stated that first of all they must define the goal of the coin, before the making and emitting to the public, in order to avoid bad consequences.

Weidmann also says that banks should be prepared, making their payment transactions widely faster and cheaper, after which the use of the digitalized version of the euro should be introduced. If this is achieved, it could produce a condition in which projects as Libra will be pointless. When asked the question if the announcement of the cryptocurrency of Facebook, Libra, had any real influence on the financial world, he says:

 “I would be careful with the concept of currency. Facebook is planning a digital form of payment, tied to a basket of multiple currencies such as the euro and the U.S. dollar. This creates an exchange rate risk for the users. We have stable money with the euro that has proven itself of the past decades.”

He also adds that stablecoins of that kind can find their usefulness and success higher in countries that have weak official currencies, for example, the developing economies. When it comes to the latest Libra news, we could see that earlier this month the whitepaper of the expected stablecoin was updated in order to remove dividends payable to those investors, aside from eliminating a potential conflict of interest.