G7 Report: How Should Regulators and Central Banks React to Global Stable Coins such as Libra?

Key benefits and risks of stable coins

Challenges for public policy and regulation

  • Legal certainty: The legal basis of the stable coin should be clear and transparent in all relevant jurisdictions.
  • Sound governance: A sound governance has to be established before starting a stable coin’s Operation.
  • Financial integrity: The highest international standards with respect to anti money laundering (AML) and counter-terrorism financing (CTF) have to be applied.
  • Safety, efficiency and integrity of payment systems: Safety and efficiency of payment systems have to be ensured by effective technology-neutral Regulation.
  • Consumer/investor protection: Consumers and investors have to be informed of all material risks and their individual obligations.
  • Fair competition in financial markets: Competition in financial markets should not be undermined and interoperability with other payment systems has to be supported.
  • Financial stability: Financial stability has to be ensured with global stable coins. Risks related to credit risks, maturity and liquidity mismatch, or operational risks, which could lead to bank runs, have to be addressed.

How to regulate stable coins?

How should central banks react?

What about Libra?

What about traditional currencies the on blockchain?

Conclusion

Remarks

  • Blockchain knowledge: We wrote a Medium article on how to acquire the necessary blockchain knowledge within a workload of 10 working days.
  • Our two blockchain books: We have edited two books on how blockchain will change our society (Amazon link) in general and the everything related to finance (Amazon link) in particular. Both books are available in print and for Kindle — currently in German and soon in English. The authors have been more than 20 well-known blockchain experts in startups, corporations and the government from Germany, Austria, Switzerland and Liechtenstein — all contributing their expertise to these two books.
Our two books: the first one on blockchain and the society and the second one on blockchain and finance

Authors

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Philipp Sandner

Philipp Sandner

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Professor | Lecturer | Author | Investor | Frankfurt School Blockchain Center