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 at a conference in Luxembourg, reported Reuters.
Since Libra was announced in June, government officials and regulators from across the globe have expressed their concerns. Committees in both the U.S. House and Senate held hearings about it in July.
The Libra aims to empower the masses who do not have access to bank accounts and could use the digital currency for various transactions.
However, some of the concerns voiced have included potential volatility, money laundering and consumer protections. In a joint statement issued late last week after a meeting of eurozone finance ministers, France and Germany said that Facebook’s plan for Libra “fails to convince” them that risks related to security, investor protection, money laundering and terrorist financing, and “monetary sovereignty” will be adequately dealt with. “We believe that no private entity can claim monetary power, which is inherent to the sovereignty of nations,” the statement reads.
Earlier this week German Vice Chancellor and Finance Minister Olaf Scholz said during a panel discussion in Berlin that Facebook’s planned crypto coin, Libra, will be rejected. And a few days later Chancellor Angela Merkel’s cabinet passed a blockchain strategy that prevents any parallel currencies to be issued in the country. While the cabinet is in favor of the digital transformation of its economy, it is against private companies issuing digital currencies.
