FSB Chair Randal K. Quarles: Stablecoins Adoption Could Be A Problem For Regulators
Stablecoins and cryptocurrencies do not threaten financial stability currently, but the potential scale of their influence on the global financial system is large enough to become a problem for regulators. This says Chairman of the Financial Stability Board (SPS) Randall Quarles at the summit of the European Banking Federation in Brussels.
He noted that the FSB is closely monitoring the influence of cryptocurrency on the financial system. The department has repeatedly discussed gaps in the regulation of the industry and a supervisory approach to it. Quarles believes that the emergence of major players such as Facebook on the market requires financial regulators to carefully study the issue.
The FSB Chairman has repeatedly expressed his concern about the impact of cryptocurrency on financial stability. In particular, during his inaugural speech, Quarles emphasized that cryptocurrency can “undermine any financial program.”
He draws attention to the Libra project from Facebook, not for the first time. However, he said in July that cryptocurrency could turn from a potential threat into a real one with the advent of stablecoin.
Therefore, the FSB formed a working group for the analysis of Libra.
The threat in stablecoins, in particular in Libra, is seen not only by Quarles but also by other regulators. Last week, the ECB member board, said Libra could solve the main problems of the global payment system.
Some countries are very categorical about this. For example, Germany approved a blockchain regulation strategy, which provides for a ban on the circulation of any alternative national currency money in the country. The ban also applies to Libra and other stablecoins.
Amid regulatory pressure, investors began to abandon the Libra project. Four members of the Libra Association have expressed a desire to distance themselves from the organization. These are Visa, Mastercard, Stripe, and PayPal. And while the first three companies haven’t gone beyond unconfirmed press reports yet, PayPal seems to be very serious.
A key meeting of the Libra project partners was held in Washington yesterday, with all Libra Association members present except PayPal representatives.