The Libra token has not yet launched but is already an influential figure within the global financial industry as well as the world of cryptocurrency. Libra, for the first time, got many people talking about cryptocurrency and because of the influence of Facebook, could go on to be one of the most used currencies in the world overnight when it launches in 2020. Perhaps one of the biggest indicators of Libra’s influence is the number of world leaders and regulators who have held meetings with Facebook to properly understand the token and are finally paying attention to cryptocurrency.
This was a sentiment raised by by Benoit Coeure during a hearing of the Committee of the Digital Agenda at German parliament on September 25, 2019.
Coeure is a member of the European Central Bank as well as a chair of the Committee on Payments and Market Infrastructure and stated during the hearing that Facebook’s Libra has done more than just create a new way for people to send money but has forced central banks to consider two of the major issues that exist in terms of sending money around the globe.
The problems he highlighted with the global financial system is the lack of access and efficiency of funds transfers. This leads to a situation where 1.7 billion individuals around the globe do not have access to proper financial services despite the fact that 1.1 billion of them own a mobile phone and 25 percent of them have access to the Internet. When the Libra white paper was first released, it was stated that Facebook wanted to bring banking services to the neglected and unbanked and this is clearly an issue that has existed for a while. Financial inclusion is also hindered as a result as additional financial services can also not be accessed. Coeure also made reference to cross-border payments as he stated that this is essential for migrants within the first world while working and sending funds back home and find the process of doing this to be expensive, more difficult and more tricky than domestic transfers.
While Coeure admits that more needs to be done to properly understand the Libra token, as well as testing in a suitable environment before launch, he admits that it has been a wake up call for lawmakers to address the underlying problems in the financial industry.
“The demand for fast, reliable and cheap cross-border payments is bound to grow further in coming years. Policymakers and central banks should respond to these challenges,” he said.