A Bank of Canada executive urges all central banks to develop their digital central bank currencies (CBDCs) if Libra is blocked by regulators
Timothy Lane, deputy governor of the Bank of Canada (BoC), is advising central banks around the world to have their CBDCs in place if regulators block the Pound currency. Facebook and its partners have been working on digital currency for a year and a half, but continue to face regulatory challenges from several countries around the world.
Facebook’s Pound currency will help regions with and without a bank in the world to get instant and fast financial services. It would also follow the path of cryptocurrencies, making it easier for people to conduct international transactions. However, as a stablecoin that aims to achieve global coverage, Libra has faced challenges from regulators in Europe, the United States and other parts of the world.
Due to the challenges, Libra may have difficulty reaching the desired level of adoption. Suppose that regulators block Libra in a given country due to regulatory issues. In that case, Timothy Lane advises central banks in these countries to have their own digital currency ready for their citizens to use.
“If we are saying well, it must be (central bank digital currency) and not Libra, so we have to have something ready so that if a decision were made that the central bank’s digital currency is the way to go, we would really be ready to launch it “, Added the BoC executive.
In addressing an online discussion panel organized by the Central Bank Payments Conference, Lane pointed out that the Bank of Canada has been working in its digital currency and they are satisfied with the pace at which they are moving forward. Lane added that the BoC would consult with Canadians to hear their views on the resources they want their CBDC to have.
Currently, the BoC has no legislative power to provide digital currencies to its citizens. It is only available for designing and developing fiat currencies. However, as the need for digital currencies continues to emerge, the BoC may receive legislative authority from Parliament to issue a CBDC.
In a separate online panel, Lane argued that there is no urgent need for central banks to issue their own CBDCs. However, he acknowledged that circumstances are changing rapidly, mainly due to the development of Libra.
Lane concluded by saying that “Libra, in a sense, suggests that central banks need to get this thinking going more quickly than they have done so far.“