Zeeshan Feroz, United Kingdom CEO of Coinbase, has argued that we need centralized entities like central banks and Facebook to support the crypto ecosystem.

In an interview with CNBC published on Oct. 24, Feroz said he saw two ways for cryptocurrency to go mainstream: central bank digital currency (CBDC) issuance and Facebook’s Libra.

Central banks will catalyze adoption better than Silicon Valley

As distinct from cryptocurrencies, a CBDC is a digital currency issued by a central bank, whose legal tender status depends on government regulation or law. CBDCs such as a digital US dollar or British pound, Feroz argued, could “catalyze adoption in a way that us geeks in Silicon Valley might not be able to.”

Feroz omitted mention of the only CBDC to have been announced by a major global economy to date: the People’s Bank of China’s digital renminbi.  

Another route to mass adoption, he continued, would be via Facebook, “with the billions of users that they have”:

“Libra as a currency has the potential to be a form of payment that is really universal in its nature. It’s not going to be easy, you’re really challenging the status quo. We’re at step one of a thousand step journey.”

Coinbase is one of the 21 remaining companies that are part of the Libra Association, which has been under scrutiny by lawmakers across the world and has consequently lost seven high-profile participants, including Visa, eBay and Mastercard.

Feroz argued that at the end of the long journey with Libra, we could be poised to establish “a financial system that’s more open, where people can send funds globally as easily as you send an email.”

We need centralized entities before utopia

Notably, when pressed as to the question of whether a project such as Libra doesn’t merely replace institutional and governmental control with a corporate centralized alternative, Faroz separated his stance from those who see centralization as anathema to “true crypto” — whom he categorized as “purists.” He argued that:

“To transition from the world we’re in today to that utopia, perhaps you need centralized entities, you need an on and off-ramp. You can’t buy crypto if you don’t have a centralized business that can maintain those relationships with banks.” 

The CEO said he believes there is a place for centralized businesses to support the crypto ecosystem, yet that he nonetheless buys into a part of that ecosystem being decentralized.

During a six-hour testimony before the United States House of Representatives Financial Services Committee yesterday, Facebook CEO Mark Zuckerberg broadly failed to assuage lawmakers’ concerns regarding the launch of Libra.