This post is by Alan Scott who was not able to post in his own name today.
Here comes Facebook!
Here is our pick of the 3 most important Stablecoin news stories during the week.
This week was all about Facebook. The Regulators are getting more urgent, the politicians are getting anxious and finally the launch is getting closer.
Firstly, the Bank of International Settlements (BIS), which is a kind of Bank for Central Bankers, released a very good working paper on stablecoins, risks and regulation.
“Global stablecoin proposals like Libra, claim that they will make possible new forms of online exchange through their 24/7 availability, borderless nature, fractionalisation and integration with non-financial services. In this light, they aim to challenge existing digital means of payment for e-commerce like traditional bank payments, credit cards and electronic wallets.
The response to global stablecoins should address the potential for other stablecoin uses, such as embedding a robust monetary instrument into digital environments, especially in the context of decentralised systems. Looking forward, in such cases, stablecoins may allow for embedded supervision. At the same time, we suggest that many of these benefits may be achieved – and arguably more effectively in many cases – with CBDCs and other initiatives such as fast payment systems.”
Then we learned more about Facebook’s launch. “LONDON (Reuters) – Facebook’s Libra cryptocurrency is readying to launch as early as January, the Financial Times reported on Friday, citing three unidentified people involved in the project.
The Geneva-based Libra Association that will issue and govern Libra plans to launch a single digital coin backed by the dollar, the FT said, citing one of the people.”
Meanwhile, more and more Politicians are realizing that we are about to enter a new monetary world and that the State is in danger of being late to the party.
“Olaf Scholz, the German Finance minister on Friday said that the European Central Bank must work very hard towards finalizing their plans for a digital Euro and a digital payment network.”
So competition is good, Facebook’s move is forcing Central Banks to figure out quickly how to regulate stablecoins and upgrade their own infrastructure (from where their lack of attention has in part created the opportunity).
Alan Scott is an expert in the FX market and has been working in the domain of stablecoins for many years.
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