Not a payment vehicle, not a store of value
Per the announcement, the assets offered by the current cryptocurrency landscape — such as Bitcoin — provide only a very limited portion of the features expected of traditional money. The statement – titled “Crypto tokens are not real money” – is based on an answer provided by the German federal government to a question from the Free Democratic Party parliamentary group.
The answer provided defines the basic features of money as the following: exchange and means of payment, store of value and unit of account. The announcement points out that the volume of payments carried out using crypto is limited when compared to fiat currencies.
Stablecoins are not an alternative to fiat money
Moreover, the author of the statement also claims that the fluctuations reported by the value render crypto-tokens unsuitable to be a store of value. The answer provided by the government states that stablecoins attempt to solve the issues caused by excessive price fluctuations. Still, the government explains that it intends to forbid their adoption:
“It will be ensured that stablecoins do not establish themselves as an alternative to state currencies and thus call into question the existing monetary system.”
Lastly, the government also noted that they had yet to determine whether Facebook’s Libra would be compliant with German law. The white paper of the project is not an appropriate source of information to judge the matter and more information is needed, the statement reads.