LUXEMBOURG (Reuters) – Digital currencies, such as Facebook’s (FB.(O) the balance will disrupt the financial system, either by forcing the central bank to innovate for the future, or by the use of a global role, which could challenge the dominance of the us dollar, ECB board member Benoit Coeure said on Tuesday.
FILE PHOTO: Benoit Coeure, member of the board of the European Central Bank (ECB), pictured during an interview with Reuters journalists at the ECB’s headquarters in Frankfurt, Germany, on May 17, 2017. REUTERS/Kai Pfaffenbach/File Photo
Looking to set up an inexpensive, global, payment, network, Facebook, announced plans earlier this year to create the Scale, “stablecoin” next year, spooking global regulators, who are now scrambling to come up with the necessary regulations.
‘Global ‘stablecoin’ initiatives, such as the monitor, it will prove to be annoying in one way or the other,” Coeure told a conference in Luxembourg. “They are the natural result of the rapid advances in technology, globalization, and the changing preferences of the consumer.”
While regulators have expressed serious concerns about the Scale, Coeure pointed to the relative attractiveness of these currencies, which can enable them to be better, to be able to compete with the dollar, the euro, was not in a position to do so.
For such currencies, aimed at retail clients and it is based on the existing infrastructure, which would enable them to spread rapidly.
Facebook’s goal is to Balance, connect to the WhatsApp messaging service to add a payment leg is denominated in a worldwide implementation. Such a position would give the right Scale for a global role.
“The available evidence suggests, therefore, that the transaction, and switching costs are much smaller in the case of a retail consumer for the payments for the traditional currencies used for the wholesale cross-border trade and finance,” Coeure added.
“The balance is, without a doubt, a wake-up call for the central banks to strengthen their efforts to the improvement of the existing payment systems,” Coeure added.
The authorities ‘response has to be faster, at lower cost, payment services, and in the world to work together to come up with the rules of the central bank’s digital money,” he said.
“The next logical step would be for the world’s central banks to join forces to jointly investigate the feasibility of a central bank of digital currency that is based on common technical standards.”
Reporting by Balazs Koranyi; Editing by Chizu Nomiyama and Alex Richardson