ECB: Universal Stablecoins Likely to Pose a Risky Financial Threats to a ‘Fragmented’ Europe
Benoit Coeure, an ECB (European Central Bank) member has warned that universal stable coins are yet to be properly tested, which means that they pose a hazard through several policy domains.
Coeure, who is a member of the Executive Board at ECB made these remarks during a joint conference of the National Bank of Belgium and the ECB. The remarks were part of his November 26th speech titled “Crossing the chasm to the retail payments of tomorrow.”
Broader Policy Risks Posed by Universal Stablecoins
His speech mainly focused on the inability to come up with a Pan-European solution for cryptocurrencies and digital retail payments that would be driven by the market.
Apart from the progress that has so far been made by back-end projects such as TIPS (Target Instant Payment Settlement systems) and SEPA, there is no other Pan-European led solution that has been able to make significant progress when it comes to online payments and POS.
He went on to note that the European Union was, therefore, in danger of losing its current economic edge. In his view, the Pan-European level has been paralyzed by national fragmentation and ever muggy novelty.
Two decades after the launch of the euro, the inability to harmonize the cross-border payment services has forced consumers to seek cheaper alternatives and rely on emerging ecosystems. At this point, he went on to add that there lay a danger ahead if Europe continued to over-rely on the new universal initiatives:
“Global stable coin arrangements […] raise potential risks across a broad range of policy domains, such as legal certainty, investor protection, financial stability, and compliance with anti-money laundering requirements.”
Coeure went on to stress that the continued dependence on global players from outside the European markets was bound to create some serious threats to the payment systems already in place in Europe.