Governments And Central Banks Race To Create A Public Stablecoin

Facebook’s upcoming stablecoin named Libra has been making headlines for the past year, after it was officially announced by the head of the company, Mark Zuckerberg. While the Libra coin news show that there is a lot of regulatory scrutiny around the project, governments and central banks are somehow prepared to create a publicly backed ‘stablecoin’ of their own.

What does this mean?

Well, for starters, it means that Facebook’s Libra scratched the surface of possibilities for stablecoins. Its scheme to create its own money in the form of the Libra coin has set off a global race to beat the social media giant at its own game. Now, Canada may be one of the most important players.

Governments and central banks from all around the world realized that the strong reaction from the US Federal Reserve chair Jerome Powell towards the Libra project and its announcement in June – was in fact a path for Facebook towards domination in the money segment.

Canada, on the other hand, has been one of the leaders in researching how to create and manage a digital coin that is backed by a national central bank. With the arrival of the Libra idea which presents a credible new global currency, Canada was activated to think outside the box and see if it could rival Facebook.

Not only the governments and central banks have been making progress while reviewing stablecoins – even the G7 group of large industrial economies have been working on the idea. Right now, there are obvious signs that many countries are advancing in this field, with the most advanced of them all being China.

China is the first country to create a functional and tradable government-backed digital coin, the crypto news show. And while the final results about people giving up cash are always difficult to predict, it is not clear that ordinary citizens will be happy with this outcome.

Central banks and governments are still trying to create a coin which will be fully regulated and work in the scheme of digital money. The general aspect is to create something like a “stablecoin” which is how the Libra was conceived – rather than a normal cryptocurrency that would be volatile and with changing prices.