With Facebook working on its digital currency project Diem, formerly known as Libra, the idea of a private entity issuing currency did not please many financial regulators. Most of them believed that the private stablecoin could be a threat to financial markets and fiat.
Recently, Brad Smith, serving as President of Microsoft, sided with regulators on this matter at a conference hosted by Bank for International Settlements. According to him, governments are the only authorities to issue digital money as they alone are “responsible to the public and always have public interest” in mind, when it comes to “money supply.” He further said:
I’m not a big fan myself of encouraging or asking or wanting us to participate in the issuing of currency. I think the world has been better served by what has been a movement over centuries to put that in the hands of governments.
Although regulators remain skeptical about Diem and the idea of privately issued stablecoin, the project is taking new approaches to launch its crypto. The team responsible for Diem is preparing to launch a stablecoin within this year. Their goal is to “enable a simple global currency and financial infrastructure that empowers billions of people.” It also plans to get a license through the Swiss Financial Market Supervisory Authority, or Finma. According to Christian Catalini, co-creator of Diem, the project could support a transition to CBDCs and may have close co-operation with global custodian banks.
However, the Microsoft President has made the company’s opposition to projects such as Facebook’s Diem rather clear. He further said:
We’re not a bank and we don’t want to become a bank and we don’t want to compete with our customers who are banks.
Interestingly, Smith would not be the only Microsoft exec who supports regulators rather than emerging tech companies. Earlier, the company’s founder Bill Gates said he was “not short Bitcoin” and that he has taken a neutral view on the crypto asset. Following this comment, Gates also admitted that he was “not bullish” on Bitcoin, at the time and that his bearish opinion is due to Bitcoin’s high energy consumption.