{"id":32477,"date":"2020-11-27T16:22:28","date_gmt":"2020-11-27T14:22:28","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=32477"},"modified":"2025-08-28T08:51:02","modified_gmt":"2025-08-28T05:51:02","slug":"ecb-sees-libra-launch-as-a-threat-to-the-future-of-fiat-currencies","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/ecb-sees-libra-launch-as-a-threat-to-the-future-of-fiat-currencies\/","title":{"rendered":"ECB sees Libra launch as a threat to the future of fiat currencies"},"content":{"rendered":"

The European Central Bank (ECB) warned that the emergence of the Libra stablecoin could put the fate of fiat currencies at stake. The monetary regulator’s response followed reports of Facebook’s planned January 2021 launch of a digital currency, Finextra<\/a>.<\/p>\n

Earlier on Friday, November 27, the Financial Times reported<\/a> that FINMA could grant Libra Association permission to issue a 1:1 US-dollar-backed coin.<\/p>\n

ECB Executive Board member Fabio Panetta, at a Bundesbank conference, warned that Libra would impose higher credit, market and liquidity risks on users, and that the issue of the stablecoin could pose \u201cpotential systemic consequences.\u201d<\/p>\n

To mitigate Libra\u2019s risks Panetta considers it appropriate to require the issuer to place reserve assets on deposit at the ECB.<\/p>\n

He noted that Libra’s emergence would require the ECB to \u201cre-invent sovereign money.\u201d He added that this implies the availability of ECB money at all times in the form of a digital euro.<\/p>\n

\n

\u201cLibra could threaten monetary sovereignty. This could happen if corporate-issued stablecoins displace fiat currencies as a means of payment. In this case, the role of money would be reduced to a \u201cclub good\u201d<\/a>, offered in exchange for a fee or membership on the platform,\u201d said a member of the ECB’s executive board.<\/p>\n<\/blockquote>\n

Panetta noted experiments<\/a> in issuing a digital euro, including in cooperation with the Bank for International Settlements. He said the work is progressing along four tracks.<\/p>\n

\n

\u201cFirst, we will test the interoperability between the digital euro and existing central-bank settlement services. Second, we will study the relationship between DLT technologies and centralized systems. Third, we will consider the use of payment-focused blockchains with digital identification. And fourth, we will assess the capabilities of hardware devices that could enable autonomous transactions, ensuring privacy,\u201d he explained.<\/p>\n<\/blockquote>\n

German Finance Minister Olaf Scholz, who also attended the conference, urged ECB officials to accelerate research.<\/p>\n

\n

\u201cNow is not the time to observe and delay. We must understand what we must do with a digital euro,\u201d he added.<\/p>\n<\/blockquote>\n

Earlier in November, ECB chief Christine Lagarde said<\/a> that launching a central-bank digital currency (CBDC) could take two to four years if such a decision is made.<\/p>\n

Earlier, the ECB president announced<\/a> a survey on the digital euro for EU citizens. Lagarde stated<\/a> that the asset would complement cash, not replace it.<\/p>\n

In October, a working group of experts from the ECB and 19 national central banks defined<\/a> possible scenarios requiring the issuance of a digital euro.<\/p>\n

In May the ECB considered three Libra use-case scenarios and concluded that the amount of funds directed toward a global version of the stablecoin could reach \u20ac152.7 billion \u2014 \u20ac2.93 trillion.<\/p>\n

Subscribe to ForkLog news on Telegram: ForkLog FEED<\/a> \u2014 the full feed, ForkLog<\/a> \u2014 the most important news and polls.<\/p>\n","protected":false},"excerpt":{"rendered":"

The European Central Bank warned that the appearance of the Libra stablecoin could put the fate of fiat currencies at stake. The regulator’s response followed reports of Facebook’s planned January 2021 launch of a digital currency, Finextra reports.<\/p>\n","protected":false},"author":1,"featured_media":26216,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1095,1410,1089,807],"class_list":["post-32477","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-cbdc","tag-ecb","tag-libra","tag-stablecoins"],"aioseo_notices":[],"amp_enabled":true,"views":"29","promo_type":"1","layout_type":"","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/32477","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=32477"}],"version-history":[{"count":1,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/32477\/revisions"}],"predecessor-version":[{"id":32478,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/32477\/revisions\/32478"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/26216"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=32477"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=32477"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=32477"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}