Yesterday the EU Blockchain Observatory and Forum held a series of discussions about central bank digital currency (CBDC). Three central bankers from the European Central Bank (ECB), the Bank of Japan (BoJ) and the Bank of Canada had different perspectives on the threat that Facebook’s Libra might present to monetary sovereignty.
The ECB was concerned about relying on dominant companies such as Facebook-backed Libra. Japan says its cashless payment sector is so competitive that it’s unattractive to stablecoin organizations. Meanwhile, Canada’s primary concern is dollarization, whether that’s a Libra USD stablecoin or a U.S. Federal Reserve digital dollar. The Canadian perspective was illuminating.
Ulrich Bindseil, ECB Director General of Market Infrastructure and Payments, presented the conventional perspective that Libra, with its Facebook audience, could potentially become a dominant player. This is an issue when combined with the fact that the companies behind Libra are for-profit. The implication was that this contrasts with the public good aspect of central bank money.
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