Mark Cliffemight, ING Chief Economist says central bank cryptocurrencies will launch in the next two to three years. He adds digital currencies wholly developed and supported by central banks of various countries will start to emerge soon.
ING published a video on Friday in which he says that Facebook’s Libra is putting monetary authorities of many countries under pressure. Its launch is due in 2020, and central banks have to look for alternatives in the same timeframe.
Libra is just one example of how cryptocurrencies are emerging out of the shadows and overtaking conventional monetary system the world over. He adds that there is a heightened sense of emergency amongst the central banks globally.
Central bank cryptocurrencies are the panacea?
A digital currency powered by central banks is the elixir the world needs. Virtual currencies will not only help replace hard cash, but they will also solve many security flaws of conventional monetary systems. There are numerous other benefits like privacy, greater transaction efficiency, decentralization, and fungibility.
A major benefit is the smooth shift towards negative interest rates. Digital transactions will allow banks to move in this direction further. Brand new avenues of policy options will emerge from central bank cryptocurrencies that will undoubtedly help banks tackle economic downturns more swiftly. Digital currencies have the potential to support fledgling economies due to their ability to penetrate social spheres more effectively.
Governments the world over hate Libra
Libra is a major reason why central banks are treading the digital path and exploring government-backed cryptocurrencies. However, not everyone is sporting open hands! Germany and France have come out openly against Libra. Bruno Le Maire, French finance and economy minister back the country’s efforts to block Libra throughout the European Union (EU).
He is in discussion with Christine Lagarde and Mario Draghi about developing a ‘public digital currency’ for the EU. Here, China leads the pack since it has disclosed plans to launch its own Libra competitor. As per the People’s Bank of China, its digital Yuan is also closer to launch.