ECB policy maker: Libra may challenge the dollar status and support the establishment of the international central bank digital currency

On September 18th, at the meeting on the topic of future international monetary system in Luxembourg on Tuesday, European Central Bank (ecb) policy maker Benoit Coeure said that private stable coins like Libra may challenge the global dominance of the dollar. Also expressed support for the proposal of the Bank of England Governor Mark Carney to establish the international central bank digital currency.

Coeure explained that the wave of globalization and the rapid development of online services have driven consumers' demand for cross-border, high-speed payment services, which is what Facebook Libra and other plans are trying to cater to, but they are accompanied by weaker security. And this is where the central bank can make a difference.

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(Photo: European Central Bank Benoit Coeure)

“Under certain circumstances, if private digital currency is allowed to develop, it may challenge the hegemony of the dollar more easily and quickly than the currency issued by other sovereign countries,” said Coeure, chairman of the G7 Stabilization Working Group. “Next Naturally, the global central bank join forces to jointly study the feasibility of central bank digital currency based on common technical standards."

It is reported that last month, President Carney elaborated on his proposed international central bank digital currency proposal at the Federal Reserve meeting in Jackson Hole, Wyo., which will eventually replace the dollar's dominant position in international transactions. He said that this is better than allowing another national currency such as the renminbi to replace the US dollar.

Carney went on to say:

"In the long run, we need to change the rules of the game. When changes come, we should not let currency hegemony continue."

Coeure said that the use of international currency has been plagued, although the euro was born 20 years ago, but cross-border e-commerce in the euro zone did not take off, only one-third of European e-shoppers bought from sellers in other EU countries. commodity. The convenience and speed offered by the Facebook system may change the rules of the game. The question is whether they can provide the stability of traditional currencies, and global regulators are trying to investigate this.

It is reported that before the next International Monetary Fund (IMF) and World Bank annual meeting in mid-October, President Coeure may propose policy recommendations on the issue of stabilizing the currency.

Coeure concluded by saying:

“Libra has undoubtedly sounded the alarm for central banks, forcing them to step up their efforts to improve existing payment systems, which is a win-win situation for the global community.”