FSB Recommends Stablecoin (Libra) Safeguards as G7 Continues Blockade
Finance officials never once named libra. But they didn't have to; the proposed stablecoin's shadow still looms large.
Oct 13, 2020 at 6:44 p.m. UTCUpdated Aug 19, 2021 at 4:58 a.m. UTC
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The Financial Stability Board (FSB) recommended on Tuesday that governments closely regulate "global stablecoin" projects to keep those privately issued currency competitors from disrupting the world economy.
- FSB unveiled 10 "recommendations" for regulating stablecoin data safeguards, contingency plans, governance frameworks and other apparent pain points in its report.
- As the nongovernmental group's broadly worded, non-binding proposals still need tailoring for specific jurisdictions, the report underscores how far prospective stablecoin issuers still have to go.
- The G7 economic bloc – U.S, Canada, Japan, Germany, France, Italy and Britain – also reiterated Tuesday that it will stonewall any "global stablecoin project" that tries to launch before clearing regulators' strict (and evolving) scrutiny.
- Reuters first reported on the G7's draft statement.
- Facebook-backed libra is undoubtedly the best known stablecoin initiative. It is also the most frequent target of regulators' ire, often blastied by name. Here, however, officials appeared to focus on global stablecoins overall, never once specifically mentioning libra.
- The Libra Association has already made major concessions in past attempts to calm regulators' concern. In April, the Association ditched plans to back its not-yet-launched stablecoin with a basket of national reserve currencies.
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