European Central Bank board member: Globally stablecoin untested, may trigger risks in multiple policy areas

According to recent foreign media news, Benoit Coeure, a member of the European Central Bank (ECB) board, warned that global stablecoins are still untested and may cause potential risks in multiple policy areas.


Image source: Pixabay

European Central Bank Executive Committee member Coeure spoke at the joint meeting of the European Central Bank and the National Bank of Belgium on November 26, entitled "Crossing the retail payment gap tomorrow".

Global stablecoin brings broad policy risks

Coeure's presentation focused on the failure to build a digital retail payment solution dominated by the pan-European market.

He said that while progress has been made in back-end programs such as SEPA and the TARGET Instant Payment Settlement (TIPS) system, no pan-European solution has made equal progress in terms of POS and online payments.

Therefore, the European Union considers that “the EU risks losing its economic advantage”, and he believes that the division of the country paralyzes competition and stifles innovation at the pan-European level.

Twenty years after the advent of the euro, the failure to unify cross-border payments has stimulated consumer interest in faster and cheaper alternatives and new ecosystems. Here he warns of the potential risks that Europe may face by relying on the new global plan:

"Global stablecoins have added potential risks in a wide range of policy areas, such as legal certainty, investor protection, financial stability, and compliance with anti-money laundering requirements. Authorities have made it clear that there is a high level of commitment to implement these stablecoin plans Threshold. "

Couere continues to emphasize that reliance on non-European global players poses strategic risks to "autonomy and resilience of the European payment system."

Central banks should not stifle the private sector

Coeure further stated that as emerging technologies reshape consumer payment behavior, the central bank will need to adjust its policies and instruments to meet new consumer protection and monetary policy transmission challenges.

He pointed out that the European Central Bank is investigating whether the central bank's digital currency can ensure that citizens "can still use the central bank's currency even if they eventually no longer use cash", but noted that it must pay attention to its widespread impact on financial intermediaries.

Coeure emphasized that potential central bank-led initiatives should not crowd out private companies trying to develop fast and efficient retail payments in the euro area.

As previously reported, Couere has been cautious about the global stablecoin payment system, and discussions have intensified since Facebook launched its Libra project.

Libra has received a cold response from several European lawmakers, including French Finance Minister Bruno Lemaire, who warned that Libra should not be authorized on European territories because it would undermine the country's currency sovereignty.