It’s no surprise that European institutions are spearheading innovation and regulation of cryptocurrency, but this latest move will affect central banks around the world.
The Bank of International Settlements (BIS) appointed Benoît Cœuré as the new head of its Innovation Hub. The international organization’s mandate includes the topics “central bank digital currencies, global stablecoins, payment innovations, the impact of big tech on financial intermediation, regtech and suptech, fast-paced electronic markets, and digitalisation of trade finance.”
The demand for regulatory expertise and guidelines has accelerated since companies including Facebook, JPMorgan and Wells Fargo announced their own digital currency efforts.
Europe hasn’t exactly welcomed initiatives like Facebook’s Libra with open arms. France and Germany moved to block it, vowing “no private entity can claim monetary power, which is inherent to the sovereignty of nations” as Karma reported earlier.
Libra’s original promise was financial inclusivity, promising to “help bring people everywhere equal access to financial services.”
“With Libra, anyone with a $40 smartphone and connectivity will have the ability to securely safeguard their assets, access the world economy, transact at a much lower cost, and over time access a whole range of financial services,” David Marcus, Facebook’s vice president of messaging products, has said. “We firmly believe that if Libra is successful, it can be a non-linear step change for billions of people who need it the most.”
Will the central banks be able to step in or hold big banks and tech firms accountable in their mission to do so?
The BIS, which is owned by 60 banks including the Bank of England and Board of Governors of the Federal Reserve, is the latest international organization to try.
“We must make the best use of innovation to support financial stability and promote financial inclusion,” Cœuré said in a statement.
The BIS Innovation Hub will have three locations: Switzerland, Hong Kong and Singapore, according to its website.
Cœuré served on the executive board of the European Central Bank and was considered to be the “best-suited candidate” for the role of the ECB president earlier this year, according to a Reuters poll of economists. His five-year BIS term starts in January 2020.
Based on his official CV, he doesn’t have a particular background or academic interest in digital innovation or cryptocurrencies.
But the fact that central banks around the world are beginning to take financial inclusion seriously and don’t want to be left behind is a win for everyone.
