Jens Weidmann, a policymaker at the European Central Bank (ECB), called on the banks in Europe to roll out a faster and cheaper mechanism to transfer and curb the rise of alternatives such as Facebook, Inc. (NASDAQ:FB)‘s Libra. However, he said, not asking the banks to develop alternative solutions immediately. It is up to the companies to launch their products to meet the demands of the customers.
Weidmann also heads Bundesbank in Germany. He urged to exercise caution against the private digital currencies. His views assume significance and echo the concerns of Europe officials against the Libra of the US that is backed by several national currencies.
Mark Carney backs launching digital coins
Christine Lagarde, the president of ECB, in common with Mark Carney, the governor of the Bank of England, said central banks should think whether it makes sense to introduce their digital coins. It will be part of a discussion in the strategic review that would start this month.
Weidmann has not opposed such an idea but said the banks should consider the pros and cons of such a move. Whatever the form of currency may be, it should be under the oversight of the government to prevent terrorism financing and money laundering activities. Lagarde said ECB would establish the objectives for the digital currency task force by the mid of 2020.
The market cap of bitcoin is Euro 100 billion
Lael Brainard, the governor of the Federal Reserve System, has outlined the risks associated with cryptocurrencies, mainly Libra. She said the market capitalization of Bitcoins (BTC) is small at the beginning of Benoit’s ECB term, and only a few cryptocurrencies existed. The market cap of bitcoin is now over Euro 100 billion. In the eight years, a lot of cryptocurrencies are developed.
Sweden and China expects to launch digital currencies
Sweden and China are expected to unveil national digital currencies shortly. According to an interview with Handelsblatt, Weidmann said China, which has a different political system, expects to launch national digital currencies faster. The social market economy will have more solutions.
The central bank in Germany is experimenting with the digital currency for transactions between the commercial banks and the central bank.