There has certainly been a lot of buzz about Facebook's Libra stablecoin in the months since its white paper was released. Most fascinating is the level of debate surrounding the project despite Libra having not been officially launched as of yet. No matter where you stand in that debate, it is undeniable that Libra has done something Bitcoin could not do: it has forced central banks and government regulators to sit up and take notice.

If Facebook was a start-up today rather than a global social media powerhouse, few people would think twice about Libra or its companion project, Calibra. Neither would be seen as anything more than just another cryptocurrency project that may or may not grow legs. But Libra is different because Facebook is no mere start-up. The company is considered as one of the 'Big 3' tech companies that exert considerable influence over much of society. Facebook's two companions are Google and Amazon.

The same debate now surrounding Libra would ensue if Google and Amazon attempted to match Facebook's ambition in the cryptocurrency space. And who knows? They may very well do so in coming years. For the meantime though, Libra is dominating the cryptocurrency discussion around the globe.

Regulators take Libra seriously

Bitcoin has been around for more than a decade. It is easily the world's most dominant cryptocurrency in terms of reputation, market value, and usability. There is no question that all other cryptocurrencies are judged by the Bitcoin standard. And yet, central banks and regulators have never taken Bitcoin seriously as a potential disruptor to global financial networks. Therein lies the difference between Bitcoin and Libra.

So what does Libra possess that Bitcoin lacks? Built-in worldwide adoption. Bitcoin began as a virtual unknown. Its creator had to sell the idea to an initial round of investors willing to spend to get the project off the ground. Since then, Bitcoin's explosive growth has been the result of a combination of good marketing, positive media coverage, and word-of-mouth.

Yet despite Bitcoin's strengths as a cryptocurrency, worldwide adoption is still scant by comparison. When you compare the number of global citizens who use Bitcoin to those who use Facebook, it isn't even close. Bitcoin is nearly universal in the cryptocurrency space, but Facebook is universal across the world.

This is what has central banks and regulators so worried. Facebook already has the infrastructure and resources it needs to provide users with an alternative payment system that could completely bypass traditional banking. All that remains is for them to come up with an actual stablecoin that delivers on its promises. That is what Libra portends to be.

A central bank wake-up call

A demonstration of just how worried central banks are is found in remarks recently made by European Central Bank (ECB) executive board member Benoit Coeure. In addressing Germany's parliament, Coeure said that "Libra has undoubtedly been a wake-up call for central banks and policymakers." He went on to say that Facebook's stablecoin could revolutionize cross-border payments and provide access to a global financial system that meets the needs of billions of unbanked people.

Coeure's comments would seem to point to Libra as a good thing for central banks. But that's only if you are not a central bank insider. To Coeure and his colleagues, Libra's potential is a threat in that it goes well beyond cross-border payments and assistance to the unbanked. It has the potential to completely undermine central bank influence over economics and government policy.

Libra is viewed as such a threat that Germany's parliament has vowed to fight its development on European soil. French leaders have made similar comments. Meanwhile, government officials and the U.S. are exploring ways to regulate Libra to such a degree that it would not pose any threat to the central banking system.

If Libra never launches

Libra has indeed done something that Bitcoin could never do, and that is forcing central banks and regulators to sit up and take notice. Even if it never launches - and that is a distinct possibility, by the way - there is no way to put the proverbial cat back in the bag. It is out. It intends to stay out.

Let us assume that Facebook never does get Libra off the ground. Would everything suddenly return to the way it was? Absolutely not. As evidence, consider the ECB's stablecoin project. They have been working on a European digital currency for quite some time. In fact, they were working on it well before Facebook's Libra announcement. They only recently stepped up their efforts in an attempt to preempt Libra.

Other world governments have been quietly working on stablecoin projects as well. The U.S., Canada, and UK are all rumored to be fairly close to having workable systems. Then you have countries, like Venezuela for example, that have already launched their own cryptocurrencies.

Here's the point: world governments already intend to introduce digital currencies at some point down the road. It is not a matter of 'if', but of 'when'. All Libra has done in this regard is light a fire under central banks and government regulators and cause them to kick things into high gear.

Action in the private sector

The keen eye will notice that there has been an uptick in private sector activity over the last few months as well. Whether or not this activity is directly related to the Libra announcement remains unclear. But Facebook's plan to get into the cryptocurrency space is as good a reason as any for the private sector to ramp up.

The thing about the private sector is that they understand the implications of not getting on board the cryptocurrency train. They see as clearly as the ECB that blockchain payment systems are eventually going to disrupt everything. They know that if they want to maintain relevance, they had better get on board now.

To that end, MasterCard recently announced a strategic relationship with R3, the blockchain technology company responsible for creating the Corda Enterprise platform for payments. Corda itself is a blockchain development platform originally established by a consortium of global financial institutions that went on to form R3.

By partnering with R3 and Corda Enterprise, MasterCard hopes to become the de facto network for processing payments between financial institutions. They want their network to be the primary network on which Corda Enterprise does what it does.

Make no mistake about it: this is a big win for MasterCard. As large and powerful as it is, MasterCard still lags behind chief rival Visa. Establishing a working relationship with R3 and Corda puts it in a strategic position to make MasterCard the go-to provider for institutional payments, just as Visa dominates retail payments.

What it all means

In order to close this post out properly we need to tie everything together. Though it may be hard to wrap your brain around it, what's currently happening with cryptocurrency in both the public and private sectors is very much linked with Facebook's plans for Libra. Carefully considering the details suggests this is all heading in a singular direction - with or without Libra.

So where is it headed? To the eventual replacement of paper bills and minted coins. Bills and coins served a valuable purpose in their day. But they have become cumbersome in the era of electronic payments. Even now, payments made electronically are represented only as numbers on a ledger. Merchants, banks, payment process, etc. are not shipping large amounts of cash back and forth.

Bills and coins only get in the way of electronic payments. So to maximize efficiency and lower the cost of making payments, they have to go. And they will. There is coming a day in the not so distant future when every nation's fiat will be digital only. That is the first step.

The second step is to create some sort of global currency that facilitates cross-border payments at both the retail and institutional levels. Where this goes is anyone's guess. One option is for nations to maintain their own sovereignty and digital fiats for domestic transactions but rely on the global currency for cross-border payments.

The other possibility is that the eventual global currency just replaces all national fiats. Such a system would eliminate economic borders for all intents and purposes. It would also eliminate the need for national central banks and monetary policy regulators.

Starting the conversation

If nothing else, Libra has started a conversation that world leaders and bank officials were previously unwilling to have. It has forced people in decision-making roles to sit up and take notice of the fact that the days of traditional printed bills and minting coins are numbered. It has forced the private sector to get on the blockchain train instead of continuing to turn their heads while secretly hoping it goes away.

Libra may very well amount to nothing. Bitcoin may eventually become little more than a digital security. The fact is that no one really knows. We do know that the conversation has now started. That conversation will likely lead to stablecoins becoming the currency of the future. Beyond that, we will have to be content to wait and see where it all leads.