Tech giants and government officials brought their simmering dispute over the future of cryptocurrency to the World Economic Forum, arguing over whether providing a way for the unbanked to tap into financial services is more important than concerns over privacy.
Facebook ignited global concerns that a digital currency would circumvent the traditional banking system when it announced plans in June to launch its cryptocurrency called Libra in the first half of this year. Central bankers and others began weighing in on whether or how Libra could be regulated, and some of the world’s major central banks said this week that they were teaming up to study developing their own digital currencies.
“There are so many people that are strapped in the cash economy today that if they have a window into the world’s economy and the ability to digitize their money and have more opportunity, it changes their lives,” David Marcus, the executive who leads Facebook’s Blockchain team, said at the forum in Davos, Switzerland.
Critics say Libra and other proposed cryptocurrencies would threaten the global monetary system and users’ privacy. But China’s Communist Party, a cheerleader for blockchain, the technology that underpins Libra, last year announced plans to use it to manage risk and ensure loyalty.
Christopher Giancarlo, former chairman of the U.S. Commodity Futures Trading Commission, called for the launch of a central bank-issued “digital dollar” in response to the Chinese plans. Central bank digital currencies could make it easier to move money across international borders while still being traceable to prevent corruption and money laundering.
“What we are proposing is a digital form” of the dollar “that would be minted by the central bank” and “made available to users through the traditional banking system and other banking enterprises,” Giancarlo told CNBC.
Also at Davos on Thursday:
- France and the U.S. agreed on future steps toward a global rewrite of cross-border tax rules for the digital era, French Finance Minister Bruno Le Maire said.
- German Chancellor Angela Merkel called on world leaders to fight global warming, saying time is running out to protect the planet.
- The U.S. wants to negotiate a trade deal with the European Union but will apply tariffs on car imports from Europe if deemed necessary, according to Commerce Secretary Wilbur Ross.
- Royal Bank of Canada CEO David McKay said any shift to a more climate-friendly economy still depends on fossil fuels.