European Central Bank executive board member Benoit Coeure said that financial regulators must act fast to prepare for Facebook’s Libra stablecoin, Bloomberg reports on July 7.
Per Bloomberg, Coeure argued on Sunday in Aix-en-Provence in southern France that allowing for the development of new financial services and asset classes in a regulatory void is irresponsible. He concluded:
We [financial regulators] have to move more quickly than we’ve been able to do up until now.
According to Coeure, the development of digital assets has exposed gaps in current financial regulations, and underlines banks’ slow rate of adoption of new technologies:
All these projects are a rather useful wake-up call for regulators and public authorities, as they encourage us to raise a number of questions and might make us improve the way we do things.
The ECB has generally approached crypto assets with caution, with one bank official predicting that crypto will end up as a “complete load of nonsense” in January. The bank has also discussed the possible benefits and drawbacks of central bank digital currencies.
Coeure’s reaction is in line with the predictions of Jeremy Allaire, co-founder and CEO of payments company Circle. In an interview with Bloomberg released earlier this week, Allaire noted that he hopes Libra will trigger the development of national policies concerning digital assets.
Last week, the United States House of Representatives Committee on Financial Services requested that Facebook and its partners to stop development on the Libra stablecoin. The request came on the heels of a letter from various advocacy groups, urging Congress to implement a moratorium.