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New study: How can regulators tackle the threat posed by Facebook’s Libra and stablecoins?

London 12th September 2019 – Moorwand, a dedicated BIN sponsor that turns compliance into a competitive advantage, has today launched a new whitepaper Regulating Instability Coins. The whitepaper – authored by Robert Courtneidge, CEO of Moorwand and one of the world’s top 10 payment lawyers – proposes regulatory principles for stablecoins like Facebook’s Libra.

Regulating Instability Coins is a meta-analysis of over 20 reports on the issue of stablecoins, including FATF’s “Guidance on virtual asset service providers”, the FCA’s final “Guidance on Cryptoassets” and BIS’s “Big Tech in Finance: Opportunities and Risks”.

Based on this analysis, Robert sets out key recommendations for what regulators need to do to tackle the threat that stablecoins pose to the global financial system, and, in particular, central banks and traditional financial institutions. The recommendations cover both what can be done within existing law, as well as new principles that regulators must adopt if they want to ensure a level playing field between ‘Big Tech’ companies like Amazon and Facebook and traditional financial service providers.

The whitepaper also covers:
• Crypto evolution – from a cult-like niche to a fully-realised promise that will change the global financial system
• How stablecoin operators work outside of legislative protections, acting almost as a private central bank
• The growing tension between ‘Big Tech’ players, central banks and governments over control of monetary policy
• Why regulators need to prevent a bifurcation of the global financial system between sovereign and crypto

“Since it was announced on the 18th of June 2019, Facebook’s Libra has received widespread attention partly due to its promise to become a true global digital currency,” said Robert Courtneidge CEO of Moorwand. “However, regulators are not being prepped to manage the challenges posed by Libra and other stable coins. Stable coins, delivered by ‘Big Tech’, are being given a free pass by regulators but must be held to the same standards as a bank or payments firm if they are to operate in the same space.

“Libra for example raises a number of concerns, one major issue being Facebook’s sheer determination to find a host nation that will let it operate to its own advantage. Without a global regulatory response, Libra will be able to function as freely as its host nation’s regulatory environment. Ultimately, if we are serious about holding ‘Big Tech’ to the same standards as the rest of the finance industry, then we must act. I believe this white paper sets out a clear set of recommendations for regulators to tackle the challenge of stable coins without quashing the innovations from crypto firms and ‘Big Tech’ players.”

The whitepaper is available for download here: https://www.moorwand.com/resources

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Posted by on Sep 12 2019. Filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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