The advent of Facebook’s Libra project has caused quite a bit of regulatory stir across the world.
Government bodies on nearly every continent have come forth to question the project’s motives and mechanics, and–in some cases–to try and shut the project down completely, or at least delay its development.
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However, as the eventual launch of Libra or a similar platform seems increasingly inevitable, a growing number of government and financial industry bodies seem to be adopting another approach toward combating the possible negative effects of Libra or something like it: competition.
Indeed, it was the launch of Libra that seems to have catalyzed China to make the final push into preparing the launch of its digital CNY, which is expected to launch in the near future, although the exact timing of the launch is not yet known.
… #PBOC has been studying #DCEP for five or six years, and is likely to be the first central bank in the world to launch a digital currency,” said Huang Qifan, Vice President of #China Center for International Economic Exchanges, in #BundSummit #stablecoin #digitalcurrency pic.twitter.com/2M2lKKAWoA
— China Finance 40 Forum (CF40) (@ChinaFinance40) October 28, 2019
“The paper put forward by the German banks wants every user of a digital euro to be identifiable, which means linking currency to identities,” Phan said, “something that Bitcoin avoids.”
“How identities would be protected and kept private is another open question. The Know-Your-Customer function could fall on the central bank, and all of your transactions would be traced by the central bank and they’d probably share this information with the relevant tax agencies and authorities. “
“This is a scenario whereby the ECB is damned if it does, and damned if it doesn’t.”
Jeffrey Cammack, COO & Editorial Director of FX Scouts, told Finance Magnates that there may come a point when the European Central Bank essentially has no choice but to pursue the launch of a digital euro–and that that point may have already come.
“This is a scenario whereby the ECB is damned if it does, and damned if it doesn’t,” Cammack said. “The future of currency will become more global and more liberalized, and there is no way for the Eurozone to get away from that.”
“While the Euro will never be able to be liberalized to the extent of other leading cryptocurrencies or Libra, but there is a possibility to create movement away from the rigid economic structures currently in place,” he continued.
“Just how far will remain to be seen, because the stability of a currency requires trust in the management of the currency, and unless governments lose the faith of their population, governments will remain the golden standard of trust.”
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