Stablecoins pose risks to public policy priorities

A member of the board of the European Central Bank (ECB) has argued that stable currencies such as Facebook's long-awaited currency, Libra, pose a risk to public policy priorities.

ECB Board of Directors member Benoit Coeure presented his comments on the issues of regulation of stable currencies at a meeting held at the Bank for International Settlements (BPI) in Basel, Switzerland, Reuters reported on September 16. Coeure specifically stated:

"The stablecoins have not been tested to a large extent, especially at the scale necessary for the operation of a global payment system. (…) They give rise to a series of serious risks related to public policy priorities. The ribbon for regulatory approval it will be high. "

26 global central banks and Libra

The BIS event hosted 26 global central banks and the team behind the Libra project to assess the risks to the financial stability of the project. It is said that the event was the first important meeting between the founders of Libra and global politicians since Facebook revealed its plans for the stablecoin project on June 18.

Earlier, Coeure stipulated that the Libra currency will not be released until global regulators are satisfied. He said that user safety must be guaranteed before its launch, and added that ensuring the protection of user privacy and property rights may require significant consideration and long debate by regulators. Coeure also encouraged financial regulators to act quickly to prepare for Libra's release.

Libra team response

In the midst of the ongoing meeting between the founders of Libra and the global central banks in Basel, Calibra CEO David Marcus took a step forward to protect the position of the Libra Association.

Marcus argued that the Libra project is not intended to form a new currency, but rather to build a "better network and payment system that works on existing currencies" to offer significant value to users around the world. He stressed that there will be no creation of new money, which "will remain strictly in the hands of sovereign nations."

Keep reading:

• Libra does not threaten the sovereignty of nations, says the CEO of Calibra
• PayPal: There is still much work to be done to make Libra a reality
• Central banks will meet with the founders of Libra on Monday in Switzerland
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