A central banker from Sweden’s Riksbank has publicly admitted that Facebook’s Libra exposes the obvious weaknesses in existing financial infrastructure.
Crypto Superior for Cross-Border Payments At Present
Gabriel Soderberg reportedly said this week that regulators and bankers are behind the times when it comes to things like cross-border payments.
Speaking to Coindesk, Soderberg said:
“Libra showed there is a demand for something that central banks have not yet delivered, which is cheap, efficient cross-border payments. Highlighting this gap means central banks really have to think about, ‘OK, how do we proceed?’ Here there is a problem that we haven’t solved and how do you solve that with maximum security and resiliency.”
When it comes to moving money across borders, Bitcoin, Libra, or any other cryptocurrency will most likely win hands down.
So long as there is liquidity on the receiving end — to include a Bitcoin ATM — the transaction will be cheaper and likely faster than using a traditional bank wire.
Bitcoin ATMs have higher fees than other ways to exchange cryptocurrency. But these are still likely to be less than the fees imposed by banks for the same purpose.
Facebook and its Callibra Association, which stewards Libra, has faced a lot of regulatory pressure to hold off until, essentially, governments give the go-ahead.
Facebook crypto chief David Marcus and CEO Mark Zuckerberg have both assured the government that they are not looking to build anything subversive.
Facebook Libra: A Threat To The State?
Nevertheless, a threat to the state is exactly how some politicans and policymakers have interpreted Libra.
Bitcoin and other cryptocurrencies, meanwhile, have fallen into perhaps their second market lull of the year. Since a recent minor collapse, Bitcoin, for example, has been hovering around $8,000.
Libra has yet to officially launch.
Facebook even earned the attention of the Swiss government, who said the company may need special licensing to do all it plans for Libra.
Globally, Libra’s regulatory map is a nightmare. It’s not much different than the same for cryptocurrencies generally. But Facebook is the biggest elephant in the room. It gets the most attention, even if authorities are often quieter in their approach.
Saifedean Ammous, who believes that hostile regulators are a boon to crypto prices, also says that one way governments and banks can thwart Bitcoin or cryptos generally is to build a better version of its services.
The sentiment is echoed this week by bankers like Soderberg, who will likely not be the last to choose a more progressive approach to crypto.