Benoit Coeure: "Currencies like Libra could threaten the power of the US dollar"

Benoit Coeure, policy maker for the European Central Bank and member of the working group for cryptocurrencies of the G7, recently assured that the popular stablecoins driven by private entities could threaten the international power of the US dollar.

The statements took place during an international conference held in Luxembourg yesterday, Coeure said that globalization and the rapid evolution of online services drive the demands of consumers that involve cross-border payments and fast transactions, so initiatives like Libra address these needs but they lack many guarantees regarding security.

In this regard, Coeure stated:

In specific circumstances, and if allowed to develop, private digital money initiatives could challenge the supremacy of the US dollar much easier and faster than through the currencies issued by other sovereign bodies … The next natural step would be for the Central and international banks join forces and jointly investigate the viability of digital currencies issued by state institutions under common technical standards.

Changes in the rules of the game

Changing the tone a bit, Coeure made some comments in which he supported the statements of the governor of the Bank of EnglandMark Carney, who proposed that central banks should work on the issuance of a digital currency.

In that order of ideas, he acknowledged China's efforts in promoting this initiative, and assured that it was even preferable that the new currency of the Asian country displaced the dollar rather than a digital currency promoted by a private entity.

However, the most interesting point of his presentation had to do with the changes of rules for the financial ecosystem, so the official indicated:

In the long term, we need to change the rules of the game. This change has nothing to do with replacing one hegemonic currency with another.

At that point, he indicated that Facebook It could bring major changes for the industry, but he questioned whether the entity could guarantee the stability that characterizes traditional currencies such as the dollar or the euro, which regulators are trying to define.

Will it be a threat?

Talking specifically about Pound from Facebook, Coeure mentioned:

Undoubtedly, Libra has been a wake-up call for central banks to strengthen their efforts to improve existing payment systems. This in itself is, without a doubt, a situation of mutual benefit for the world community.

However, this week both the director in charge of Calibrate, David Marcus, like the head of the Libra AssociationBertrand Perez said that the new digital currency did not represent a danger to the economy of the countries precisely because the assets are backed by a basket of fiat currencies.

In this regard, Marcus commented that the decision to create more money is left to the sovereign nations and their duly authorized financial entities, so Facebook He is only working on the design of a payment mechanism that makes things easier for people.

Source: Bloomberg

Angel Di Matteo Version / Daily Bitcoin

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