Libra forces central banks to reconsider their operations - the Head of the Riksbank

Facebook’s digital currency Libra has pushed central banks to change their work, believes the head of the Bank of Sweden Stefan Ingves. He aslo said that the regulator was exploring the possibility of issuing its own digital currency.

Speaking in the interview with CNBC, he called Libra “an incredibly important catalyst event,” which made central banks re-think about their role. 

“In this day and age we have to twist things in our heads and do things based on the assumption that nothing is on paper, and then when we talk about money everything is going to be digital in one form or the other,” he said.

The head of Riksbank is confident that Libra has a lot of challenges ahead.

“But the old issues — private sector money or public sector money — they are basically identical, and if history gives us any guidance at all then almost all private sector initiatives have collapsed sooner or later.”

He also added that the Riksbank had beel already looking into the issuance of the central bank digital currency due to the sharp decrease of cash in circulation. The regulator can launch a pilot project of e-crown as early as this year.

Notably, the Swedish central bank is not the only one considering its own digital currency amid the launch of Libra. 

Thus, in July, the former head of the People’s Bank of China Zhou Xiaochuan called Libra a threat and urged to speed up the development of the digital yuan. In August, representatives of the Chinese central bank announced that the state digital currency was ready after five years of development.