Monday, 25 May 2020

ECB's Coeure says "Stablecoins are largely untested" and sounds risks

The ECB member told bank officials from around the world that the new stablecoins are largely untested.

The comments were made at the Bank of International Settlements (BIS) event in Basel, where the Group of Seven working group on stablecoins met to discuss regulatory issues posed by the new digital currencies.

Benoit Coeure said :

“Stablecoins are largely untested, especially on the scale required to run a global payment system,”

“They give rise to a number of serious risks related to public policy priorities. The bar for regulatory approval will be high.”

A Libra spokesman said talks were "constructive" and added:

“We recognize that blockchain is an emerging technology, and that policymakers must carefully consider how its applications fit into their financial system policies,”

David Markus from Facebook comment after stating Libra was created to be a payment network running “on top of existing currencies,” he then added. “As such there’s no new money creation, which will strictly remain the province of sovereign Nations”.

These stablecoins were not even on governments minds until Facebook announced Libra. Now that the Libra in June that they were going to create the cryptocurrency it seems governments stood up and took notice.

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