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ECB Lawmaker Jens Weidmann Wants to Let Libra Face the Free Market

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European Central Bank - Jens Weidman

This month saw the emergence of a more open tone towards Facebook’s Libra concept by some lawmakers within the European Central Bank. Specifically, a lawmaker by the name of Jens Weidmann believes that a more hands-off approach will prove the tenacity of the market. The statements put forth by Weidmann, who also serves as the President of the German Central Bank, showcase a re-centering by some important ECB members towards free-market values.

In a recent interview, Weidmann proposed a new hands-off approach towards the controversial crypto. Uniquely, he explained that the ECB needs to let the market play out before it decides that its necessary to crush innovation in the sector.  Weidmann stated that if given the chance, competitors will create a more robust and secure option than Facebook’s proposed stablecoin.

Not the Place for Central Banks

Interestingly, Weidmann also doesn’t believe that central banks should start competing in the cryptocurrency sector as well. This view puts her directly at odds with a plethora of global regulators. For example, in the latter part of 2019, Chinese central banking executives announced the start of the development of its own stable coin. The project goes under the name “The Digital Currency Electric Payment system (DCEP).”

Stop Calling for Intervention Prior to the Launch of the Product

Weidmann voiced concerns about the tendency for officials to call for government intervention when dealing with emerging digital assets such as cryptocurrencies. he explained that there are some market indicators that should play out prior to “calling for the state right away.” Basically, he believes the ECB needs to provide companies a chance to develop a corresponding offer.

Jens Weidmann via The Irish Times

Jens Weidmann via The Irish Times

Free Market – Jens Weidmann

Weidmann is confident in the fact that there are numerous other firms that possess the skills and technical know-how to create a better option. He knows that on top of the creation of cheaper and faster alternatives, many people will desire a more secure and trustworthy option.

Anti -Libra Sentiment

Libra has been under fire ever since the concept was first brought forth to US lawmakers. Unfortunately, for Libra’s developers, the rest of the world appears to be just as cautious about the concept. For example, the President of Switzerland, who also functions as the country’s head of finance, went as far as to call Libra a “failure.”

European Central Bank Sentiment

Weidmann’s unique view on how to deal with the Libra project is a far cry from the other members of the ECB. Last year, the group’s President, Christine Lagarde made a statement that put the group’s viewpoint more in line with China’s strategy rather than a fair market approach.

In a public statement, Lagarde acknowledged the clear and growing demand for stablecoins. She explained that it was important for the ECB to stay “ahead of the curve” when dealing with these new financial instruments. Unfortunately, no further specifics were brought to light.

Jens Weidmann Has Faith in the Market

It’s refreshing to see a financial regulator such as Weidmann stand up for free-market values. His straightforward approach towards the development of new FinTech is what the cryptocommunity needs to continue along the path of innovation. Hopefully, more ECB members will get on board with this strategy moving forward. For now, the Libra project has the attention of the entire financial sector.

David Hamilton is a full-time journalist and a long-time bitcoinist. He specializes in writing articles on the blockchain. His articles have been published in multiple bitcoin publications including Bitcoinlightning.com

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