Ever since Facebook announced the launch of Libra, we have only seen negative news about the digital token as it fights with the SEC and the world central banks and governments to clear the regulations.
Benoit Coeure, who is a member of the Executive Board of the European Central Bank(ECB) said that Libra is a wakeup call for the central banks and policymakers and how they should take required actions against these challenges. He added that stablecoins, like Libra, could help in fixing the deficiencies in the architecture of the market.
The cryptocurrency will help in bringing 1.7 billion people closer to the financial grid, and it will make cross-border payments cheaper, faster, and more transparent. Libra is backed by several big names from the industry, including Facebook, and Facebook plans to use its vast user base to make the digital currency successful.
Benoit Coeure chairs the Committee on Payments and Market Infrastructures at the Bank for International Settlements. Along with this, he is also the head of the Group of Seven(G7) Committee on stablecoins.
Concerns related to Libra
He thinks that even though they will fix some issues from the current system, the chances of these services being used as a means of money laundering and financing terrorism will increase. He also mentions concerns regarding consumer protection, data security, competition, and taxation issues.
The stablecoins also acts as a threat to the monetary policies and financial stability of a country as they can affect the money supply outside the traditional channels.
According to Benoit, a lot of changes can be done in the market to regulate the products within the framework, and he also suggested new rules to be applied in a way to promote a certain degree of coordination between institutions globally.
The G7 group will offer their recommendations in time for the IMF-World Bank which runs from 14th October to 20th October. He made these statements as Libra is facing backlash from countries like Europe and China. These statements make it sound like that the stablecoin might end up launching soon but with tightly supervising the stablecoin.