By Francesco Canepa
CHANTILLY, France, July 18 (Reuters) – Stablecoins like Facebook’s Libra can foster financial inclusion but they must be held “to the highest regulatory standards” to ensure that they aren’t used to launder money and that users are protected, a Group of Seven taskforce on the issue concluded.
The taskforce presented its first report to G7 finance minister and central bankers meeting in Chantilly, France.
Facebook’s plans to launch Libra, a digital token backed by four official currencies, have raised concerns ranging from consumer protection to money laundering and even the notion that the traditional monetary system could be disrupted.
The taskforce, chaired by European Central Bank board member Benoit Coeure, found stablecoins can bring down the cost of remittances and forms of payment, helping poorer people who can ill afford financial services.
But they need to be strictly regulated to ensure they are stable, safe and free of criminal activity.
“A global stablecoin for retail purposes could provide for faster and cheaper remittances, spur competition for payments and thus lower costs, and support greater financial inclusion,” Coeure told the G7 meeting.
“However…they give rise to a number of risks related to public policy priorities including anti-money laundering and countering the financing of terrorism, consumer and data protection, cyber resilience, fair competition and tax compliance.” (Reporting By Francesco Canepa Editing by Raissa Kasolowsky)