Germany’s federal government issued a press release on the 20th, said the government cabinet at a recent digital meeting, will not allow cryptocurrencies to compete with the country’s fiat currency. The emergence of Bitcoin has triggered a wave of innovation in cryptocurrencies, the communique said. Facebook Inc. also announced the launch of the virtual cryptocurrency Libra this year.
After in-depth discussions in the cabinet, it was suggested that cryptocurrencies such as Libra could shake up the banking and credit industries, which essentially provide banking services but not banks.
Cryptocurrencies are a digital means of payment that can be used to pay for anonymous online transactions, the communique said. There are about 4,500 cryptocurrencies worldwide.
However, the communique noted that cryptocurrencies also have many advantages. For example, it promises to bring financial services that were previously inaccessible to people in poor areas, as well as free transfers, smart contracts and many other applications.
When the German federal government launched its blockchain strategy in September, it argued that currency issuance was one of the core elements of national sovereignty and would not be allowed to be passed on to private companies.