“Libra development has become a signal for the awakening of central banks”

Libra development has become a signal for the awakening of central banks

According to ECB board member Benoit Coeure, the Libra project can both solve many problems in the field of international payments and create new complications.

“The development of the Libra project was undoubtedly a signal of awakening for central banks and regulators,” Köre said during his speech in the German Bundestag.

He emphasized that stablecoins such as Libra will allow 1.7 billion people without access to the banking system to use financial services. Libra can also make international transfers much faster, cheaper, and more transparent.

The fact that stablecoin is being developed by the largest social network Facebook and its partners gives the project a gigantic user base. That is, from the day of its launch, the project can be considered “truly global.”

The ECB board member also noted that stablecoins can be used for money laundering and terrorist financing, therefore, it is necessary to study the issues of consumer protection, data security, network stability and taxation.

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In addition, the introduction of such projects can entail serious consequences for monetary policy and financial stability, since stablecoins affect the supply of money. If a coin loses confidence, then such a situation may have systemic consequences.

“There is a risk that the monetary sovereignty of countries may be violated,” Köre concluded, noting that regulators need to develop new approaches to the supervision of stablecoins and strengthen interaction between the authorities of different countries, since Libra cannot be regulated by one state.

Benoit Köhre’s statement coincides with the opinion of ECB Executive Council Member Yves Mersch, who believes Libra could threaten EU monetary policy.


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