Fun

Libra Crypto Is ‘Undoubtedly’ a Wakeup Call for Central Banks, Says ECB Exec

News Feed - 2019-09-26 03:09:52

Facebook’s Libra could potentially solve some of the problems in the international payments market, but it might create a number of others that will require creative thinking by the regulators, says an European central banker.


In comments to the German federal parliament Bundestag on Wednesday, Benoit Coeure, a member of the Executive Board of the European Central Bank (ECB), said “Libra has undoubtedly been a wakeup call for central banks and policymaker,” and they should respond to these challenges.


He added that stablecoins, in particular Facebook’s Libra cryptocurrency, could help connect the 1.7 billion people globally who are now off the financial grid while at the same time making cross-border payments cheaper, faster and more transparent.


In improving access and facilitating cross-border retail payments, they could address two key deficiencies in the current architecture of the market.


Libra, which is being supported by a consortium led by Facebook, will be connected to a huge existing user base, giving it a “truly global footprint,” according to Coeure, who chairs the Committee on Payments and Market Infrastructures at the Bank for International Settlements. He is also the head of the Group of Seven (G7) Committee on stablecoins.


The central banker raises a number of concerns about stablecoins. He said that they can be used for laundering money and financing terrorism, and he notes the possibility of consumer protection, data security, network stability, competition and taxation issues.


He adds that stablecoins have serious implications for monetary policy and financial stability, as the coins can have an impact on money supply outside the normal channels, while the failure of the promised peg or the loss of confidence could have systemic implications.


“There may be the risk of the monetary sovereignty of countries being infringed,” he was quoted as saying in written summary of his comments, which was published by the Bank of International Settlements.


While he believes that much can be done to regulate the new products within existing policy frameworks, he said that new approaches are needed. He also said rules need be applied in an “internationally consistent” manner, suggesting a degree of coordination between institutions globally.


In the comments, he said that the G7 group on stablecoins would be offering its recommendations in time for the IMF-World Bank meeting, which runs Oct. 14-20.


His comments come as Libra faces hostility from some quarters, especially in Europe and China, but are in line with previous statements by the central banker, indicating that a consensus is developing around a balanced approach of welcoming but tightly supervising the stablecoin.


ECB image via Shutterstock

News Feed

Brayden Lindrea6 hours agoSalvadoran pro-Bitcoin President Nayib Bukele launches reelection bidDespite Bukele’s popularity, some critics argue he isn’t eligible to be reelected under El Salvador’s constitution.2046
Savannah Fortis15 hours agoItalian regulators investigate online AI data scrapingThe Italian Data Protection Authority has launched a “fact-finding” probe into the security practices of public and private websites to
Arijit Sarkar47 minutes agoDormant pre-mined Ethereum worth $116M resurrects after 8 yearsDuring the pre-mine period, the 61,216 Ether was worth roughly $20 million, but eight years later, it’s worth more than $116 mil
Bitcoin, Ethereum Technical Analysis: BTC Surges Above $22,000 Ahead of NFP Report
Bitcoin, Ethereum Technical Analysis: BTC Surges Above $22,000 Ahead of NFP Report Ahead of the latest nonfarm payrolls report, bitcoin rose to a multi-week high above $22,000 on F
Report: South African Digital-Only Bank Launches Crypto Payments Gateway
Report: South African Digital-Only Bank Launches Crypto Payments Gateway A South African digital-only bank (also known as a “neo bank”), Be Mobile Africa, has reportedl
Brayden Lindrea3 hours ago‘This will be our last post’ — LBRY throws in towel against the SEC“Thank you to everyone who fought with us for online freedom,” the LBRY team said.2496 Total views8 Total sharesList
Ciaran LyonsJul 29, 2023US banking advocacy group supports Sen. Warren’s reintroduced crypto billAccording to the Bank Policy Institute, including digital assets in the Anti-Money Laundering framework is essential for
Oversold Altcoins Like Solana Flash Bullish Divergences — Are Relief Bounces Coming?
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu
Crypto Super PAC uses $2.5M to support Washington, Michigan Democrats
Turner Wright6 hours agoCrypto Super PAC uses $2.5M to support Washington, Michigan DemocratsA crypto PAC used roughly $1.5 million to fund a media buy for Democrat Emily Randall, while her rival’s campaign manager cri
Turner Wright2 hours agoCore Scientific’s bankruptcy plan includes equity stake for Bitmain and AnchorageIf the plan is approved, Core Scientific could buy 27,000 Bitmain miners for roughly $23 million in cash and $54
Shiba Inu Project Reveals ‘Doggy DAO,’ Devs Say Phase 1 to Provide ‘Immediate Power to the SHIB Army’
Shiba Inu Project Reveals "Doggy DAO," Devs Say Phase 1 to Provide "Immediate Power to the SHIB Army" During the last half of 2021, decentralized autonomous organizations (DAO) hav
Payments Firm Bolt Scraps Deal to Acquire Crypto Company Wyre
Payments Firm Bolt Scraps Deal to Acquire Crypto Company Wyre California-based online payments company Bolt is pulling out of an agreement to buy crypto provider Wyre. The news of