When it comes to cryptocurrencies, central banks from all over the world have almost always been opposed to recognizing them as a legitimate currency and that is understandable considering the very nature of the thing. However, the whole thing takes a new dimension altogether when a tech giant like Facebook introduces its own stablecoin, major currencies back that like the United States Dollar and the Euro, among others. Facebook’s cryptocurrency Libra has been one of the biggest developments in the world of finance this week and considering the fact that the company already boasts of a user base of billions of people, it has the potential of capturing a large market across geographies straightaway.
Hence, it is only natural for central banks to clear their stance with regards to Libra and the Bank of England head Mark Carney made his position clear during the Mansion House speech. In this regard, Carney proved to be extremely cautious about the way in which Libra is to be handled and stated that the central bank is going to keep an open mind about Facebook’s cryptocurrency. However, he did add that an open mind did not necessarily mean that there was going to be a regulatory open door for Libra.
That being said, he was also conscious of the potential benefits of Libra as a payments mechanism and acknowledged the fact that it could turn out to be an important cog in the financial system. He said,
Libra if it achieves its ambitions, would be systemically important.” It seems that Central banks might be warmer towards Libra than they have been to other cryptocurrencies following these comments from Mark Carney. In addition to his views on Libra, Carney also spoke about the payment systems that are in place in the United Kingdom currently and stated that the infrastructure is not as great as countries like Sweden. He said, “UK is still a long way behind countries such as Sweden, where users can make direct, free and real-time bank-to-bank payments in-store and online with a text or a scan of a QR code.