UPDATE 1-Bank of England says regulators must keep ahead of stablecoins
By Huw Jones and Tom Wilson. LONDON, Sept 3- Financial regulators must avoid playing catch up with digital payment methods like stablecoins and crypto-assets, Bank of England Governor Andrew Bailey said on Thursday. “If a sterling retail stablecoin wishes to operate at scale in the UK, then we will strongly consider the need for an entity to be incorporated in the…
By Huw Jones and Tom Wilson
LONDON, Sept 3 (Reuters) – Financial regulators must avoidplaying catch up with digital payment methods like stablecoinsand crypto-assets, Bank of England Governor Andrew Bailey saidon Thursday.
Stablecoins are still a relatively niche corner of thecryptocurrency world that barely featured on policymakers’agendas until Facebook unveiled its Libra stablecoins last year.
Central banks and financial regulators feared Libra –planned as a stablecoin backed by a wide mixture of currenciesand government debt — could destabilise monetary policy andfacilitate money laundering, with some threatening to block it.
“If stablecoins are to be widely used as a means of payment,they must have equivalent standards to those that are in placetoday for other forms of payment types and the forms of moneytransferred through them,” Bailey said in a speech to theBrookings Institution.
Existing regulatory standards must be examined and updatedwhere necessary in light of stablecoins, he said, calling for aclear G20 mandate for standard-setting bodies to refresh orclarify standards.
Any stablecoin based on the pound that was launched inBritain should meet standards similar to those applied to banks,Bailey said. The issuer of such a coin would need to be based inBritain, he added.
“If a sterling retail stablecoin wishes to operate at scalein the UK, then we will strongly consider the need for an entityto be incorporated in the UK.”
Such a requirement may impact plans for Libra.
In April, the Geneva-based Libra Association, which willissue and govern the planned stablecoin, said it would offerstablecoins based on a still-undecided line-up of individualcurrencies, citing those based on the dollar, euro and sterlingas possible examples.(Reporting by Huw Jones; Editing by Tom Wilson and AlisonWilliams)
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