G20 Financial Stability Board proposes new ground rules for stablecoins ahead of Libra...

nanoguy

Posts: 733   +12
Staff member

Governments and central banks have learned one lesson from the Internet - letting a decentralized system evolve organically could spell trouble for centralized forms of power - unless they step in to change the rules.

Cryptocurrencies have been around for years, but their highly speculative nature and limited use cases have kept many people on the fence about using them to reliably store any meaningful value. More recently, stablecoins - a form of cryptocurrency whose value is pegged to fiat currency - are gaining ground so quickly that the richest countries in the world want to slow their development until they can figure a way to get in the game.

The G20's Financial Stability Board has published a document where it outlines 10 recommendations for governments and central banks on how to adapt to this new trend. The 67-page report argues that because stablecoins work across borders, countries should coordinate their regulatory efforts as a safeguard against abusing one jurisdiction's legal gaps as a way to undermine the sovereignty of another.

The FSB doesn't mention Libra by name, but most of the concerns around Facebook's cryptocurrency project are echoed in the report - namely, that stablecoins present the risk of breaking things without a clear chain of accountability and could harbor money laundering and fraudulent activities.

Governments and central banks are encouraged to ban cryptocurrencies that are operating in a legal gray zone and can't be regulated. The FSB also believes that global stablecoin arrangements (GSC) should be able to offer G20 authorities "timely and unobstructed access to relevant data and information" on users and transactions.

The problem is that while the FSB's recommendations can be implemented for traditional banking institutions, they're nearly impossible to implement on cryptocurrencies. The nature of these systems is that they're decentralized, meaning that companies like Tether, Binance, and Circle are only able to issue stablecoins but not supervise them or control the way they're used.

One thing is clear - governments and central banks aren't happy with stablecoins as they work today and this is why they've pressured many of Libra's backers into abandoning the project. The FSB noted in its report that "such instruments may have the potential to pose systemic risks to the financial system and significant risks to the real economy, including through the substitution of domestic currencies."

Permalink to story.

 

QuantumPhysics

Posts: 4,701   +5,102
The reality of the situation is that cryptocurrency is the only way for many countries to escape from under the racist economic policies of the United States of America and its affiliates.

Those country's have been ruined by US sanctions and or forced into debt by manipulation from the Europeans/ USA.

I personally want to see them succeed. Venezuela, Cuba, Zimbabwe Haiti and every other country that's fallen victim to America's IMF.

And they will.

It's so ironic how anti-free trade the governments become when vehicles for free trade appear.
 
Last edited:

Hexic

Posts: 930   +1,286
TechSpot Elite
The reality of the situation is that cryptocurrency is the only way for many countries to escape from under the racist economic policies of the United States of America and its affiliates.

Those country's have been ruined by US sanctions and or forced into debt by manipulation from the Europeans/ USA.

I personally want to see them succeed. Venezuela, Cuba, Zimbabwe Haiti and every other country that's fallen victim to America's IMF.

And they will.

It's so ironic how anti-free trade the government's become when vehicles for free trade appears.

Whoah dude.
 

Khanonate

Posts: 188   +49
The reality of the situation is that cryptocurrency is the only way for many countries to escape from under the racist economic policies of the United States of America and its affiliates.

Those country's have been ruined by US sanctions and or forced into debt by manipulation from the Europeans/ USA.

I personally want to see them succeed. Venezuela, Cuba, Zimbabwe Haiti and every other country that's fallen victim to America's IMF.

And they will.

It's so ironic how anti-free trade the governments become when vehicles for free trade appear.
And that my friend, is how sometimes you end up on a "milk carton".
 

mbrowne5061

Posts: 1,806   +1,038
The reality of the situation is that cryptocurrency is the only way for many countries to escape from under the racist economic policies of the United States of America and its affiliates.

Those country's have been ruined by US sanctions and or forced into debt by manipulation from the Europeans/ USA.

I personally want to see them succeed. Venezuela, Cuba, Zimbabwe Haiti and every other country that's fallen victim to America's IMF.

And they will.

It's so ironic how anti-free trade the governments become when vehicles for free trade appear.

Dude, you realize that Zimbabwe literally uses the USD, right? That is their official currency. Their economy, while still terrible, is tied to the United States' economy. They ain't isolated at all, except for a few individuals on the SDN list.
 

Skjorn

Posts: 578   +453
Who tf in their right mind would accept Facebook digital coins as payment for anything?