The governor of Sweden's central bank said on Tuesday that the emergence of the Facebook-led corporate cryptocurrency project Libra has been a wake-up call for global monetary authorities.
"These are issues that only crop up once in a hundred years," said Riksbank governor Stefan Ingves in an interview on CNBC's Squawk Box Europe. He added:
It has been an important catalytic event to shake the tree, when Libra turned up out of the blue, and that will force us to think harder about what we do.
Arrival of Cryptocurrencies
Many of the world's oldest central banks have been in business for more than 300 years, Ingves said, acting under the assumption that currencies would always be paper based. He added, however:
Now we must discuss things based on the assumption that nothing will be based on paper. And when we talk about money everything is going to be digital in one form or another.
Moving on to competing currency systems, Ingves said that private sector money and public sector money were are basically identical, and that "if history gives us any guidance at all, then almost all private sector initiatives have collapsed sooner or later".
When asked if Libra would survive the historical odds, and have the potential to disrupt conventional currency systems and the transmission of monetary policy, Ingves added:
It's hard to tell because they [the Libra Association] can certainly produce value-added for consumers, but at the same time, if we in the central banking community get better at doing what we do and accept that you cannot turn back time, then we will be in business for another 300 years.
Featured image by Aditya Chinchure on Unsplash