Talking about the emerging blockchain technology, ECB board member Benoit Coeure showed his concern, that the digital currencies such as Facebook’s Libra could foil the financial system. This could happen either when these emerging companies force the central banks to innovate or by globally reducing the use of fiat currency in the market. This can be a big threat to the dominance of the dollar.
Since 2017, the popularity of Bitcoin has seen a rapid increase as compared to other cryptocurrencies. Investors around the world have decided to invest in this technology of future that can possibly replace the fiat currency. Now there are 875 crypto startups all backed by investors with a total sum of $6.2 billion.
Last year Facebook too joined the game and revealed that the company would soon be going to launch Libra “stablecoin,” which will be a cheap global payment network based on the blockchain technology. The launch is set for the next year, which has scared the regulators and now they are asking Facebook to provide the regulation plan before the launch of Libra.
The growing popularity of these cryptocurrency has spooked regulators from all over the world. Benoit Coeure himself said because of the popularity of such type of currency allow them to perform more efficiently with the dollar, something that Euro was never capable of doing.
Amidst all the concern, He said these currencies are likely to become the future of our economic world by adding transaction speed, security, and cost-effectiveness to the system. Allaire supported Facebook’s Libra Coins and CBDC specifically because they are completely backed and reserved by central banks, that ascertains the secure future of these future currencies.