The controversial Project Libra is yet to see whether the tides would turn to its favor or not as the European Central Bank’s officials, along with other representatives from global central banks, have decided to discuss the stability risks associated with the project. The founders of the ambitious global cryptocurrency would meet the party in Switzerland.
A Consortium of Central Banks to Assess Libra
The initial report came out on September 14 via the Financial Times. According to the details, representatives from Project Libra would meet the officials of the Bank of International Settlements’ Payments and Market Infrastructure Committee. Notably, the CPMI is the BIS’ standard-setter for international matters. Aside from New York’s Federal Reserve Bank, Deutsche Bundesbank and Bank of England, the committee is also one of the 28 member banks of the Financial Stability Board.
The report also confirmed that the scheduled meeting between the central banks’ officials and Libra founders would be the first major conference since Facebook unveiled the project’s white paper on June 18. The meeting would be held in Basel.
ECB’s expectations and requirements
ECB’s executive Benoit Coeure would be the chairman of the meeting. He was quoted recently, at a European Union finance ministers’ meeting in Helsinki, citing that Libra must be able to meet the “very high” bar set forth by the European Union before gaining regulatory approval. He also called out to the regulators, asking them to widen their perspective on CBDC or central bank digital currency. This remark was perceived by industry analysts as a hint that ECB is planning to work on a CBDC as well.
Notably, Coeure shared that the European Central Bank had already laid out the project plan for a digital currency prior to the scheduled launch of Facebook’s cryptocurrency. In October, the ECB executive would present a report focused on virtual currencies to finance ministers of G7organization.
Also in the Helsinki gathering, Finance Minister of France Bruno Le Maire said that Europe must do something to challenge Facebook’s Libra. He suggested the creation of a public digital currency and guaranteed that he would get down to the specifics of the potential EuroCoin project with his fellow European finance ministers in October.
The recent reports on the industry highlight the warnings issued by the Bank of International Settlements to a multitude of financial services providers such as Google, Facebook, and Amazon. The BIS claims that the new offerings from major companies could pose threats to the banking sector.
On the other hand, Thoman Heilmann from the German parliament stressed that the government would not allow Libra and any other similar private stablecoin project.