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Stablecoins Like Libra Could Take the Place of USD in Future: European Central Bank

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Libra Currency by Facebook

Federal banks and other financial regulators all over the globe are worrying about the growing popularity of cryptocurrency. As a result, Facebook’s Libra is facing trouble bringing the currency of the future to the mainstream.

Recently, Benoît Coeuré, a member of the Executive Board of the European Central Bank (ECB), warned the central banks and regulators all over the world by telling them that cryptocurrencies and stablecoins can take the place of US dollars as a global currency, thus reflecting the threat of cryptocurrencies over the fiat currency.

Back in May, the European Central Bank (ECB) had expressed that cryptocurrencies would not cause any immediate harm or risks to the country’s economy. According to a report published in the same month by the Internal Crypto-Assets Task Force (ICA-TF), an advisory committee created by the European Central Bank in 2018, the number of digital crypto assets is very small in the European market as compared to the financial system published.

The ICA-TF was created with the purpose of overseeing the impact of digital currencies in the financial market and to detect the threats of cryptocurrency in Europe.

Though the report also suggests that digital currency lacks some of the characteristics of money. And currently, it’s not competing with the fiat currency, so financial regulators don’t have to worry about anything, at least for now.

Facebook’s Libra is the opensource blockchain currency meant for the local users, which can help the cryptocurrency to reach the mainstream. Benoît Coeuré said that being a stablecoin, backed by a reserve, Libra has got the chance to actually beat the USD in the market, which has spooked the US officials.

Coeuré also added,

“Libra has undoubtedly been a wake-up call for central banks to strengthen their efforts to improve existing payment systems. This by itself, is undoubtedly a win-win situation for the global community.”

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