Libra is “Wolf in Sheep’s Clothing” Says Olaf Scholz

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  • German finance minister Olaf Scholz has called Facebook’s Libra token “a wolf in sheep’s clothing”
  • Scholz has been scathing about the proposed token since its launch, concerned by the impact on monetary sovereignty
  • Scholz added that governments must strive to ensure that “the currency monopoly remains in the hands of states”

Olaf Scholz, the German finance minister who has warned about the potential impact of Facebook’s Libra cryptocurrency since its announcement last year, has said that it still resembles a “wolf in sheep’s clothing” despite presenting a vastly different proposition 18 months later. Scholz has publicly criticized the project’s reach in terms of monetary sovereignty, saying this should remain with nation states rather than extending to private companies.

Changes Not Enough to Appease Scholz

Scholz criticized Facebook’s aims with Libra soon after it was announced, issuing a joint statement with French finance minister Bruno Le Maire last September where the social media giant’s attitude to monetary sovereignty was criticized.

Libra has undergone several changes since its initial form, from moving to a dollar-only backing to the Libra Association renaming to the Diem Association, but Scholz has dismissed these changes as window dressing.

Libra’s Regulatory Risks “Still Not Addressed”

Reuters reports that Scholz issued a written statement following a G7 video conference yesterday where cryptocurrencies were discussed in which he warned that Libra was still as dangerous as it was, despite its new look:

A wolf in sheep’s clothing is still a wolf. It is clear to me that Germany and Europe cannot and will not accept its entry into the market while the regulatory risks are not adequately addressed. We must do everything possible to make sure the currency monopoly remains in the hands of states.

Libra was initially supposed to be backed by a basket of fiat currencies but following regulatory backlash it has since been watered down to be a dollar-only product and will likely be limited to Facebook products only, until it becomes more understood and used.