Bank of Canada (BOC) deputy governor Timothy Lane yesterday advised central banks to be prepared with their respective digital currencies if regulators block the cryptocurrency, Libra.
The last time Libra became the focus of the media was in April, where Facebook reportedly revamped the design of the asset including the payment system and the addition of stablecoin, aimed at meeting set standards.
Libra is seen as an asset capable of improving the quality of cross-border payments. In fact, it is able to attract more users from various backgrounds to be part of the global economy.
However, Libra's still vague status has led the central bank to take the initiative, replacing it with the CBDC. That way, the central bank will be better prepared to launch their respective digital assets at any time.
For now, the BOC is still in the process of establishing a central bank digital currency (CBDC) with a focus on emphasizing the views of the Canadian population on digital assets.
There is no denying that digital assets are the only solution for the economic downturn due to COVID-19, but Lane is more comfortable labeling CBDC as a risky asset due to competition in cryptocurrencies and banks, and how digital currencies are used for transactions.
At the same time, recently the Financial Stability Board, the FSB including the G20 has issued regulatory proposals against global stablecoins such as Libra, arguing that it would undermine the government's ability to determine monetary policy and investment within borders.
Libra Association policy director Julien Le Goc explained the progress that would be introduced not to disrupt the system or create competition but to further diversify consumer payment options and launch the system.
