Central bankers and finance ministers are not happy about the announcement of several companies, including Facebook, PayPal and Mastercard, to create their own electronic currency called Libra. "Serious misgivings" Olaf Scholz said on behalf of the finance ministers of the G7 countries. "Libellarian" is Libra, said the ECB director Yves Mersch.
This is not surprising, because Libra is nothing but an attack on the currency monopoly of the state. Corporations want to make their own money. Doubtful that is not least because of the makers. There are many companies that are not known to have scruples over the whole industry. And they also work together at Libra.
On Monday, the Libra-makers were invited to the meeting in the secretive central bank of the central banks, the Bank for International Settlements (BIS), in Basel. Afterwards it was heard that the central bankers had one thing above all else: dealing with the so-called reserve, that is the money with which Libra should be covered. It is paid by the people who buy Libra. And the money in the reserve is the reason that Libra is even a currency. If it were 100 percent Euro that could be repaid at any time, then Libra would be more of a way to settle payments. This is not so, because a basket of different currencies is being considered. And you can not pay out the according to the previously known plans not synonymous.
The talks are a start. But where does he go? Here are three theses on the future of digital currencies:
Thesis One: It's not possible without e-money
Even institutions as plump as central banks will eventually have to go with the times. Anyone who looks closely, currently sees all over Germany people who rummage at the checkout more for the cash, but: put a card, the clock present, the mobile zücken. If there is a field in the financial industry that is rapidly changing, then it is paying. It is becoming increasingly digital. That makes the central bankers think. Because if this continues to progress, the cash is pushed back more and more - and thus also the money, the ECB, Fed and Co. directly control. The cash is spent by the central banks. The central bank is only indirectly involved with a small share of the electronic money that is in our accounts and with which we now pay more in the shop. So our money is already being created by the banks for the most part. This development has nothing to do with the planned digital currency Librazu. As citizens use more and more opportunities to replace euro cash with electronic euro money, the loss of central bank money's value is entirely self-evident.
The central banks should no longer try to prevent this. You have complicated the electronic payment long enough. Instead, they should consider how they might even benefit from the change. One idea is to issue your own electronic central bank money, even to private individuals. That would be something like electronic cash, 100 per cent guaranteed by the central bank. Because the money at the bank is - as we have seen in the financial crisis - just not covered by the central bank. The idea has been around for a long time, but so far little has happened.
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Thesis two: The central banks need the private
Libra is making sure that there is movement in the digital money flow that central bankers have not wanted to deal with for so long. For now comes a private consortium and dares to offer self-electronic currency. This is as if the alarm sounded loud and clear in the deep sleep of the institutions. They sit up and rub their eyes. It would be better, they would immediately out of bed jumping.
The central banks need the private companies. Already today most of the relationships are made to the normal people, who want to have credit, withdraw money, pay or accept payments. Banks and other private institutions are far more experienced in this customer care. The central banks can not do that. But now these banks and private actors penetrate into areas that were previously regarded as sovereign areas of the state.
What now? The banks have to decide urgently: do they want to hold back and withdraw? Or do they want to fight back and defend their district? Both sounds not tempting. A ban on Libra would not be a good idea. This is because the payment processing experts involved are certainly better placed to develop good technical solutions that are even more user-friendly than the bureaucracy of the central banks. However, simply running Libra is not possible because there is always a risk that the new money could be used for all sorts of illegal activities. In the worst case, it could also prove to be unstable.
The third option would be better: cooperation. And so that the central bank Libra harshly regulated to avert damage, but not prohibited. And then learn from the currency. For example, for her own.
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Thesis three: It takes a lot more competition
So will the bank of quotes soon come out with their own electronic cash? It is to advise them. From the customer's point of view, too, more competition in the field would be welcome. So that the e-money is better. In advance, however, basic questions must be clarified. Because with the e-euro, there would be a two-class system of electronic money: that of the banks and the central bank. How should one demarcate this? How do you ensure that the money of the banks is not displaced by the bank of the bank?
It could be that the ECB eventually decides against its own electronic currency for these reasons. Then, however, the challenges will be even greater. Because the ECB must ensure that Libra still gets competition. On the one hand by additional providers. On the other hand, by making their own money more attractive and scoring on unfamiliar terrain: in customer friendliness. Otherwise, in the currency market someday happens what other digital markets have demonstrated: " The winner takes it all ." A (private) large monopoly controls the world's money. That would certainly not be communicable to people.
By the way, that does not mean that Libra has to be a success. Even now, individual points in the presented concept are extremely sensitive for the users. So it might well be that in the competition of the currencies euro and dollar remain the measure of things even in 50 years. But who knows: Maybe the competitor will make the euro and the dollar a little better.
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