LUXEMBOURG: Digital currencies such as Facebook’s Libra will disrupt the financial system, either by forcing central banks to innovate or by grabbing a global role that could challenge the dominance of the dollar, ECB board member Benoit Coeure said on Tuesday.
Looking to set up a cheap global payment network, Facebook announced plans earlier this year to create the Libra “stablecoin” by next year, spooking global regulators who are now scrambling to come up with the needed regulation.
“Global ‘stablecoin’ initiatives, such as Libra, will prove disruptive in one way or another,” Coeure told a conference in Luxembourg. “They are the natural result of rapid technological progress, globalisation and shifting consumer preferences.” While regulators have expressed serious concerns about Libra, Coeure noted the attractiveness of such currencies, which could even allow them to compete more effectively with the dollar, something the euro was never able to do.
Such currencies are directed at retail customers and they are based on existing infrastructure, which would allow them to spread quickly.
Facebook’s aim is to connect Libra to the WhatsApp messaging service, adding a payment leg to an already global application. — Reuters
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