How Libra Has Made Banks Take Crypto Seriously

• Facebooks Libra project has been the forefront of most crypto news over the course of the past year and there’s a reason for it.
• One man has openly said that Libra has given an incentive to banks to look more seriously into the world of cryptocurrency issuance. 

Facebooks Libra project has been the forefront of most crypto news over the course of the past year and there’s a reason for it. Not only is it an interesting concept but the regulatory backlash seen from the United States has been phenomenal.

One man has openly said that Libra has given an incentive to banks to look more seriously into the world of cryptocurrency issuance. 

Hiromi Yamaoka, the former head of payments and settlements at the Bank of Japan and current board member at the information consultancy firm, Future Corp made the comments in a Reuters report. 

The Bank for International Settlements was created by the central banks of Canada, Japan, European Union, Sweden, Switzerland and the United Kingdom as announced recently. 

Yamaoka stated:

“The latest decision is not just about sharing information. It’s also an effort to keep something like Libra in check… Major central banks need to appeal that they, too, are making efforts to make settlement more efficient with better use of digital technology.”

Libra is one project that is pushing the pressure on financial institutions to lower the costs of transactions. Furthermore, they also raise fundamental questions in regards to the states’ power over currency issuance. 

The former payments head raised his worries on both central banks getting involved in private-sector innovation, as well as the benefits of using central bank digital currencies to help further the effectiveness of central bank measures:

“In the world of central bankers, the idea of using CBDCs to enhance the effect of monetary policy seems to have subsided somewhat. There are increasing doubts about the effect of negative interest rates as a policy tool. If so, do you want to issue CBDCs for the sake of deploying a policy with questionable effects?”

It will be interesting to see how this plays out. For more news on this and other crypto updates, keep it with CryptoDaily!