Stablecoins harbor big risks, tough rules needed: Coeure

FILE PHOTO: Benoit Coeure, board member of the European Central Bank (ECB), is photographed during an interview with Reuters journalists at the ECB headquarters in Frankfurt, Germany, May 17, 2017. REUTERS/Kai Pfaffenbach/File Photo

FILE PHOTO: Benoit Coeure, board member of the European Central Bank (ECB), is photographed during an interview with Reuters journalists at the ECB headquarters in Frankfurt, Germany, May 17, 2017. REUTERS/Kai Pfaffenbach/File Photo

ZURICH (Reuters) – Stablecoins such as Facebook’s planned Libra are untested and pose serious risks, the European Central Bank’s Benoit Coeure said on Monday, pledging a tough regulatory approach amid global scrutiny of the social media company’s project.

Coeure’s comments came during an event at the Bank of International Settlements (BIS) in Basel, where the Group of Seven working group on stablecoins met to discuss policy and regulatory issues posed by the digital currencies backed by financial institutions and large technology companies.

“Stablecoins are largely untested, especially on the scale required to run a global payment system,” said Coeure, who chairs the BIS-hosted Committee on Payments and Market Infrastructures. “They give rise to a number of serious risks related to public policy priorities. The bar for regulatory approval will be high.

Reporting by John Miller; Editing by Michael Shields

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