Facebook’s Libra is a wake-up call for central banks, commented Benout Goeure during his speech to the Committee on the Digital Agenda of the Deutscher Bundestag. As a member of the Executive Board of the European Central Bank (ECB0), Goeure noted the traditional bank-based payment ecosystem is under pressure because of the growing demand and thus growing tech invasion of start-ups.
“All things considered, Libra has been a wake-up call for central banks and policymakers. Global stablecoin initiatives are the natural result of rapid technological progress, globalisation and shifting consumer preferences. The demand for fast, reliable and cheap cross-border payments is bound to grow further in coming years. Policymakers and central banks should respond to these challenges.”
Stablecoins need to show a sound legal basis
According to Goeure stablecoin initiatives must demonstrate a sound legal basis. Their nature exposes the market to potential conflicts of laws across the multiple jurisdictions that need immediate addressing. His statement mentioned that stablecoins target retail users, putting emphasis on the critical importance of communicating the rights of coin holders, and their obligations of issuers.
Some global challenges ahead are countering the financing of terrorism and anti-money laundry, thus putting countries in a position of dealing with those in relation to Libra’s market release. Other major issues jurisdiction will face are lated to data protection, consumer data, cyber resilience and tax compliance, both needed addressing by regulatory agencies and central banks.
Zuckerberg with no clear plans on Libra’s launch
Whilst central banks and institutions opened up the conversation of cryptocurrencies and economy, Facebook’s CEO Mark Zuckerberg refused to commit launching Libra in 2020, as previously announced and planned.
In a recent interview with Nikkei, he asked him about upcoming dates of Facebook’s stablecoin launch, to which he responded:
“Obviously we want to move forward at some point soon [and] not have this take many years to roll out,” he said. “But right now I’m really focused on making sure that we do this well.”