ECB board member Benoit Coeure delivered his comments on stablecoins’ regulatory issues at a meeting at the Bank of International Settlements (BIS) in Basel, Switzerland, Reuters reported on Sept. 16. Coeure specifically stated:
“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.”
26 global central banks and Libra
The event at the BIS hosted 26 global central banks and the team behind the Libra project to assess the financial stability risks of the project. The event was reportedly the first major encounter between Libra’s founders and global policymakers since Facebook revealed its plans for the stablecoin project on June 18.
Previously, Coeure stipulated that the Libra coin will not launch until global regulators are satisfied. He said that the proposed stablecoin must be guaranteed to be safe for users before it can launch, adding that guaranteeing the protection of user privacy and ownership rights may require significant consideration and lengthy discussion by regulators. Coeure also encouraged financial regulators to act fast to prepare for Libra’s release.
Response from the Libra team
Amid the ongoing meeting between Libra founders and the global central banks in Basel, Calibra CEO David Marcus stepped up to protect the position of the Libra Association.
Marcus argued that the Libra project does not intend to form a new currency, but rather build a “better payment network and system running on top of existing currencies” to deliver meaningful value to users over the globe. He emphasized that there will be no creation of new money, which will “strictly remain the province of sovereign nations.”