(Bloomberg) -- Digital tokens such as Facebook Inc.'s proposed Libra initiative deserve special attention by supervisors and central banks, according to Germany's Bundesbank.
While statements on the potential consequences of the social media giant's planned digital currency are currently “speculative,” projects of the sort could have a “sustainable and significant” effect on the financial system and central banks, it said in a 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 monthly report
The Bundesbank's tone, while nuanced, appears more welcoming than the reception Libra got when global finance chiefs gathered in France last week. French Finance Minister Bruno Le Maire said at a Group of Seven meeting that a private company shouldn't “have the possibility to create a sovereign currency.”
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Central banks have individually treated Libra with growing caution since its planned launch was announced on June 18, though they have yet to come up with a coordinated response. So-called “stable coins” have also spurred a debate over potentially providing digital central-bank currencies to the wider public, for which the Bundesbank said it currently sees no need.
To contact the reporters on this story: Carolynn Look in Frankfurt at clook4@bloomberg.net;Kristie Pladson in Frankfurt at kpladson@bloomberg.net
To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Jana Randow
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