European Central Bank Executive Board member Benoit Coeure called for strict supervisory principles for digital currencies and stablecoins like Facebook’s Libra, Bloomberg reported on Thursday (Oct. 17).
“In the case of Europe, neither the Commission nor the ECB intends to make Europe a no-fly zone for stablecoins. But stablecoins will have to meet the highest regulatory standards and adhere to broader public policy goals,” Coeure said in an interview ahead of a Group of Seven (G7) report on stablecoins. “There is certainly no judgment that stablecoins shouldn’t exist.”
“The nature of money will change,” Coeure told Bloomberg in an interview. “We’ve got to adapt so we can reap the benefits of technology.”
Coeure further said he is “personally pretty sure” stablecoins — virtual currency backed by a reserve asset — will likely be part of the future.
“Until recently, we’ve taken a sandbox approach to FinTech regulation under which we could afford to give projects a chance and see how risks materialize,” Coeure said. “But now we have an elephant in the sandbox, so that approach doesn’t work anymore.”
France and Germany are among the many countries alarmed that the size and scope of Libra could disrupt legal control over the currency. The European Union (EU) largely rejected regulations on cryptocurrency until Libra was announced in June.
The two EU heavyweights have criticized Facebook’s cryptocurrency effort and said it presents a risk to the sovereignty of the EU states.
The EU will tell G20 partners at the meeting of central bankers and finance ministers that the “latest developments with regard to stablecoins and the multi-faceted regulatory, oversight and supervisory challenges these represent, call for seamless cooperation and concerted response at global level,” Reuters reported Oct. 4.