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Davos panel confirms world attention is on digital currencies

The World Economic Forum debate in Davos on creating a credible and trusted digital currency confirms that the topic has the attention of the entire world, according to Moorwand’s CEO.

Robert Courtneidge, CEO, Moorwand, on Davos session

Robert Courtneidge, CEO, Moorwand

Robert Courtneidge, a previous Bank of England adviser on cryptocurrencies, said in an interview with IBS Intelligence that ever since Facebook started exploring the space with Libra, decentralised cryptocurrencies and central bank digital currencies (CBDC) has been hotly debated.

“The World Economic Forum panel seemed fervent to discuss CBDCs, perhaps by sharing the stage with Facebook, they wanted to take the wind out of Libra’s sails by arguing for an alternative option for a global stablecoin,” Courtneidge said, commenting on the Davos panel.

In the past six months, Libra has made all commercial and central banks aware that systemic change is a real-world possibility, he continued.

“The issue with binary CBDCs is that they remain within a national stack; they are like sticking plasters for specific regions – failing to address the global scale of the issue. While I agree there is space for a globally interoperable CBDC, or stablecoin, the focus right now needs to be on the underlying network on top of which these assets can function.

“It was clear that Facebook still believes that it offers the most complete and sustainable network available today to form the underlying global structure. But I do find Facebook’s repetition of the Libra project being aimed at bringing the 1.7 billion unbanked people into the formal financial economy to be misguided.

“I would argue that although Facebook’s reach is vast, it does not include everyone. In fact, if the focus is only on the underbanked, it would be counterintuitive for this movement, which is meant to be universal and sustainable.

“These conversations aren’t motivated by the number of people still transacting in cash, but by the route the payments industry is taking. We’ve come a long way! Today, our e-wallets have become our digital identity.”

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The speakers in the WEF 2020 session were David Marcus, Head of Calibra, Facebook; Sheila Warren, Head of Blockchain and DLT at WEF; Tharman Shanmugaratnam, Senior Minister and Chairman of the Monetary Authority, Office of the Prime Minister of Singapore; Neha Narula, Director, Digital Currency Initiative at Massachusetts Institute of Technology (MIT); Benoît Coeuré, Head of the BIS Innovation Hub at the Bank for International Settlements (BIS); and Valdis Dombrovskis, Executive Vice-President at the European Commission.

WEF, Davos

The World Economic Forum was as usual held in Davos, Switzerland

In the session, Dombrovskis said governments must “issue warnings to investors on the highly speculative nature” of cryptocurrencies, but that there are “needs that are unaddressed, including fast, convenient and cheap cross-border payments”.

Courtneidge argued that for a globally regulated stablecoin to be effective, the network and rails upon which it sits need to be universally accessible and engaging, and whether Facebook’s network is the answer is highly debatable.

“But the fact that we’re even having the discussion makes me optimistic,” he said. “I believe that we need to begin with the banked population, those people that will actually engage with a new digital currency on an everyday basis. If we can get that right, we’ll know that we’re on the right road to recruiting the unbanked into this movement too. To solely focus on the underbanked will continue to box them out of the formal economy – we need a global solution which is adopted by all.”

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