Benoît Cœuré (ECB): Libra was a Wake-up call for Central banks

Benoît Cœuré, member of the Executive Board of the European Central Bank (ECB), gave in a speech recently, insights, the extent to which Facebook's planned crypto-currency Libra could affect the banking and financial world. In it came also to the language, why Bitcoin as a currency, not a Chance.

By Phillip Horch
19. September 2019BTC$9.853,90 -3.16%part Facebook Twitter LinkedIn xing mail

Benoît Cœuré, a French economist and ECB Executive Board member, said in a speech on 17. September, his assessment of Facebook's Libra. Cœuré it was, among other things, the extent to which the planned Cryptocurrency and Stable Coins in General could alter the existing monetary system.

Benoît Cœuré sees Libra as a serious private money Initiative

Libra may be Cœuré, the first serious currency initiative. The main reason that the crypto-currency, if it is approved, on a private network with a global dimension slip: Facebook. Because the social network with the subsidiaries WhatsApp and Instagram holds good 2.4 billion users worldwide. All would be with their own crypto-currency supplies, would be the a good 31 percent of the world's population that could make use of Libra.

That, in turn, mountains - as well as disadvantages. An advantage Benoît Cœuré looks clear in financial inclusion – of the people, which the capitalist pleasures that were previously denied, could find by stablecoins in the sense of "Zuck-Buck" soon connection. One of the biggest disadvantages is obvious: the threat to privacy.

A world of doubtful currency in the hands of a group that is known for its Flapsigkeit in dealing with data; whether or not this will work however, it may.

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According to Benoît Cœuré Stable Coins such as Libra represents the effect of challenges in the questions, "operational robustness, security and soundness of the payment systems, customer protection, risks to financial stability and monetary sovereignty, and not least data protection and compliance with the requirements to combat money laundering and the financing of terrorism".

Call to Action: Stable-Coin-working group established

Immediately there were established at the European Central Bank is a separate working group to examine the impact of digital currencies, and especially of Stable Coins on the financial stability. The working group should, however, be for the upcoming G7 Meeting in October to be ready, the Minister, with the Council set aside is entitled to.

Ultimately, direct action is needed in this area. According to Benoît Cœuré get(t)en digital currencies what established currencies hardly create could:

I will argue that, under certain circumstances and if it is allowed, private digital forms of Money, the supremacy of the US Dollar easier and faster in question could, as the currencies of other States to be spent.

Bitcoin & co. - currencies not a threat

Bitcoin and other Crypto (private Stable Coins such as Facebook Libra) are the exception, however, according to Benoît Cœuré no greater threat to established currencies. They were ultimately unstable:

[...] unstable crypto-Assets, such as Bitcoin, the price of currencies in a Fiat extremely volatile, [can serve] never as reliable payment methods.

Libra is challenging Central banks

Ultimately, digitisation change the way how competing currencies to each other. With all caution, to be reminded of the Libra, forcing banks to rethink their approach and improve:

Libra was undoubtedly a Wake-up call for Central banks to step up their efforts to improve their existing payment channels. This alone is undoubtedly a Win-Win Situation for the global community. It is expected that the progress made by the Central banks, which are already at the technological frontier will increase the speed of technological diffusion across borders,

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Benoît Cœuré closes his argument.

More:

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