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Bitcoin and Libra Set to Compete as Central Banks Issue Digital Currencies

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by Tolu Ajiboye · 3 min read
Bitcoin and Libra Set to Compete as Central Banks Issue Digital Currencies
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Bitcoin and Libra may compete favourably in the global financial clime as several central banks plan to release their digital currencies.

Raghuram Rajan, the former governor of the Reserve Bank of India, is optimistic about the future of certain cryptocurrencies. According to Rajan, both Bitcoin and Libra may find a place in the global financial market as central banks begin to issue their own digital currencies.

According to a CNBC report, Rajan referred to Bitcoin as a “speculative asset” and Libra as a transactional token. The governor revealed this while speaking with CNBC’s Beyond the Valley Podcast. He said that Bitcoin and Libra may find a place when central banks begin to issue their own digital currencies:

“So the bottom line I think is [that] different private currencies will do different things and it may be [that] Bitcoin has value going forward just as a store of value, or as a speculative asset. While Libra may be the kind of currency which is used for transacting.”

Bitcoin and Libra in Competition with Central Banks

Before now, central banks all over the world have been working on their own digital currencies. Since this began, several crypto experts have praised the development. A top executive at Visa believes the Central Bank Digital Currency (CBDC) is one of the most important trends in the future of payments. Cuy Sheffield revealed this last month in a tweet.

In addition, CBDCs will very likely affect the entire financial system. Unlike fiat currencies, there would be no central governing authority responsible for issuance. 

Over the past few years, the People’s Bank of China has been developing its own digital currency. In April, China finally rolled out trials for its digital currency in the Xiong’an area. Among the 19 companies that participated in the trial at that time were McDonald’s and Subway. Recently, a report by Technode revealed that China is expanding its digital currency pilot to new test regions.

Bitcoin and Libra

Since its launch in 2009, Bitcoin has faced a lot of criticism. Many times, people have dismissed the king coin as a speculative asset. One of Bitcoin’s long-time critics is the Berkshire Hathaway CEO and chairman Warren Buffett. In the past, he described the asset with several discouraging terms such as “mirage,” “not a currency,” and “tulips”.

Designed by Facebook, Libra will be backed by U.S. Treasury securities and a basket of currencies upon its launch. With this, the price of Libra will be stable, unlike the instability with Bitcoin. 

David Marcus, the head of the Libra project, expressed his excitement on Libra’s progress:

“Excited with the progress of Libra in the last 9 months. I keep on thinking about all the people and small businesses that could benefit from the Libra Network already being operational- especially now during these times of unprecedented hardship.”

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Tolu Ajiboye
Author Tolu Ajiboye

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.

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