The president of the European think tank, the Centre for Economic Policy Research (CEPR), told CNBC that although Facebook’s forthcoming digital currency Libra has not been approved yet, it could spark the creation of another global virtual currency.
Since it was announced, Libra has faced a lot of criticism from multiple financial establishments and countries over security, privacy and other concerns such as money laundering and the financing of terrorism.
Facebook proposed plans for the digital currency in June this year but was met with multiple obstacles regarding regulation. On Wednesday, Mark Zuckerberg, the CEO of Facebook, appeared before the United States House Financial Services Committee but the lawmakers are decidedly not convinced if continuing the project is a good idea.
Countries like France and Germany have previously expressed reservations regarding Libra’s operations within their premises and have placed firm restrictions. The United States has raised several security issues as well and is withholding the approval until they can be clarified.
The President of the Centre for Economic Policy Research, Beatrice Weder di Mauro says that it is not likely that Libra will be given the approval, stating that Libra’s actions have shaken up the central banking community since a cryptocurrency that is globally operational and controlled by private hands is becoming more and more like an actual possibility.
Weder di Mauro told Tanvir Gill from CNBC on Thursday that it is one of the reasons why Libra won’t take off, as regulators currently seems to decide on not allowing it to happen. She claims that Libra is seen as a potential threat to the central bankers as it is billed as an international digital currency backed by a global network and could be produced very quickly.
Weder di Mauro further says that although Libra has faced many challenges, it has also opened a way for something similar to develop. She says that there is a higher possibility now for companies from the private sector and/or central banks to get together and create something similar to Libra.
She proclaims that central banks might be able to create something like this by grouping together and develop a global cryptocurrency by themselves, further stressing that such a crypto project could be a step up from the current system of global monetary arrangement.
She also asserts that a global monetary system with a global digital currency would have advantages over the one we presently have, where there is a huge dominance of the dollar. By developing a new global digital currency, such dominance would be eradicated and an equal opportunity for people could shape global business accordingly.
