Stablecoins Pose More Issues Than Benefits – G7 Task Force Report

The G7 task force has finally released its report. The latter highlights the shortcomings in the prevailing cross- border payment systems. However, the force is still wary if stablecoins will be able to resolve the same owing to their operational challenges.
Member Nations To Allow GSC Launch Post Ensuring Regulatory Compliance
The report alleges that the adoption of global stablecoins is uncertain and the same will challenge the financial stability and the international monetary system. Also, regardless of their size, they will pose risks to anti-money laundering efforts across states and will hinder tax compliance and consumer data protection.
Furthermore, the task force alleges that the G7 nations will not allow any launch of a stablecoin without first ensuring the challenges and risks. The report first despised the cryptocurrencies and said that they have failed to provide an attractive means of payment or store of value. While the task force did consider stablecoins as a means of payment or store of value, the former considers that the cons outweigh the pros. Per the report, that the launch of the same will be a threat to the global financial stability and monetary system.
The report further says that central banks, standard-setting bodies such as CPMI should keep up with their efforts to promote faster and low-cost payment systems.  Moreover, issuance of stablecoins will include governance, management entities and underlying technologies such as DLT, smart contracts or conventional FMI technology such as bank accounts.
The report mentions,
Governance plays a key role in stabilization because a central agent or group of agents must design, and set rules for, how the value of the stablecoin will be stabilized. For example, a governmental agency must set the rules that asset managers or stablecoin issuers should follow in order to ensure that any stability target is maintained.
The report further elaborated on the role of management entities on the issuance of stablecoins
Management entities also play a key role in the issuance and stabilization of stablecoins. They manage the issuance and redemption of the stablecoin, the stability of the stablecoin, or the custody of reference assets according to the rules designed by the governance layer. Management entities can also include custodians that hold reference assets, such as fiat currencies, commodities, and other financial assets. In addition, management entities could comprise a stablecoin mint that issues new stablecoins.
While stablecoins may eventually solve the same as owing to their technological prowess, there is no guarantee that the public sector and the regulators will finally put stablecoins to use as a store of value and use it as a payment system. The report seems to agree with the Financial Action Task Force(FATF). However, the FATF still shows some relaxation and is willing to approve certain new crypto-based payment systems.
Yesterday, European Central Bank Director, Benoit Coeure claimed that Global financial regulators have no plans to ban Facebook’s Libra or other stablecoins. However, digital currency projects will have to meet the highest regulatory standards. He said,
In the case of Europe, neither the Commission nor the ECB intends to make Europe a no-fly zone for stablecoins. But stablecoins will have to meet the highest regulatory standards and adhere to broader public policy goals,”
Will stablecoins eventually get their rightful place in the economy, or will they vanish into oblivion, owing to regulatory issues? Let us know, what you think in the comments below!
The post Stablecoins Pose More Issues Than Benefits – G7 Task Force Report appeared first on Coingape.
Source: CoinGape

G7: Crypto Stablecoins Like Libra Threaten Financial Stability, But Not Bitcoin

It comes as no surprise that Facebook is still on the receiving end of regulatory pressure from global economies. The social media giant has done the crypto industry few favors as all eyes are now on stablecoins and the outlook for them is predictably pessimistic. Bitcoin, however, has not been deemed a threat just yet.
Big List Of Crypto Concerns
The G7 group taskforce that issued the draft report yesterday includes senior officials from central banks, the International Monetary Fund (IMF) and the Financial Stability Board (FSB), which coordinates rules for the G20 countries.
It focuses on Libra as the big bad wolf and outlines major threats that it considers applicable to all stablecoins. In a section titled ‘ensuring resilience in the face of new risks’, the report also acknowledged that the global economy is facing uncertainty with declining interest rates, escalating public debt, and weakening financial markets.
To address these ‘new risks’ it added that the FSB is developing a new surveillance framework, to be put in place by next year. The number of challenges it considered a threat to financial stability included consumer and investor protection, data privacy and protection, financial integrity including AML/KYC compliance, and fair competition and anti-trust policies.
Basically, all of the things that Facebook cannot provide.
The list went on citing mitigation of tax evasion, market integrity, sound and efficient governance, cyber security and operational risks, and an appropriate legal basis as issues with Libra-like crypto stablecoins.
The regulatory body will submit an official issues note on global stablecoins to this week’s G20 Finance Ministers and Central Bank Governors meeting.
No Threat From Bitcoin
Notably, the report went on to add that it did not consider crypto assets such as Bitcoin a threat.
“G20 leaders noted that crypto-assets do not pose a threat to global financial stability at this point, but that they remain vigilant to existing and emerging risks.”
Before adding ‘global stablecoins’ could pose a host of challenges to the regulatory community, clearly referring to Libra.
It acknowledged the benefits of stablecoins for cross border transactions but the likelihood is that most central banks will want to use, control, and profit from their own one and not something dreamt up by a social media monopoly.
According to the BBC, a separate report suggests that Libra may not get regulatory approval even if it can address their long list of concerns.
“Addressing such risks is not necessarily a guarantee of regulatory approval for a stablecoin arrangement,”
As Libra Association members jump ship in droves, Facebook’s grand aspirations of global financial domination appear to be going up in smoke. The consortium will hold its first board meeting in Geneva today, but many of the seats around that table will be empty.
Image from Shutterstock
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MakerDao announces launch of Multi-Collateral Dai; introduces new logo 

Maker Foundation’s Chief Executive Officer [CEO], Rune Christensen, spoke at DevCon 5 held in Osaka, Japan, where he revealed the launch of Multi-Collateral Dai [MCD]. Christensen went on to announce that the launch will take place on 18 November. MCD will also be introducing several other features to the Maker Protocol like Dai Savings Rate […]
The post MakerDao announces launch of Multi-Collateral Dai; introduces new logo  appeared first on AMBCrypto.
Source: AMB Crypto

Bitcoin isn’t flexible for enterprise side of things, says former BTC Core developer

Jeff Garzik, former Bitcoin Core developer, made waves in the cryptocurrency community after he said that stablecoins are pushing decentralized finance to the next stage. According to a report by Forbes, Garzik told an audience at Consensus 2019, “Product-wise, we are in a generational shift. The stablecoin is here to stay and now people are […]
The post Bitcoin isn’t flexible for enterprise side of things, says former BTC Core developer appeared first on AMBCrypto.
Source: AMB Crypto

1500 Entities Could Join Libra; EU to Present a Case for Stablecoins at G20

Libra cryptocurrency project suffered a significant setback on Friday as PayPal has announced its official exit. As reported earlier on, CoinGape, Visa, and MasterCard are also mulling their participation.
These companies are looking to disassociate themselves with Libra due to the prejudice against Facebook.
The project has received a lot of criticism from the US, UK, France, and Germany. Nevertheless, reportedly, the European Union will present a case for Libra and other stablecoins at the G20 meet during mid-October.
Apart from Libra, USD-Tether is also a popularly traded stablecoin in the crypto-markets. So much so, that the daily volume of Tether is comparable to that of Bitcoin, in some cases even higher. The EU will tell the other members of G20 to adopt a new global strategy and digital tax system to adapt to the growth of these specialized cryptocurrencies.
‘Stablecoins’ are backed by a FIAT currency or a ‘basket of currencies and other low-risk assets,’ (as is the case with Libra). This new blockchain-based FIAT currency poses a threat to the capital volume of the Federal Reserves of a country’s central bank. The EU urges that,
“Latest developments with regard to stablecoins and the multi-faceted regulatory, oversight and supervisory challenges these represent, call for seamless cooperation and concerted response at global level,”
‘Libra is a journey, not a destination’ – Libra Spokesperson
The regulators might be strictly opposed to Facebook’s plans. However, the Association is committed to its plans on creating financial independence.
The head of the Libra Association’s policy and communications dept.,  Dante Disparte is still highly optimistic, he told the media,
We look forward to the first Libra Council meeting in 10 days and will be sharing updates following that, including details of the 1,500 entities that have indicated enthusiastic interest to participate.
The meeting of the Libra Association is close to the G20 meeting on Oct 17-18th. The names in the list of 1500 interested parties and the existing structure of the Council will be instrumental to the progress and its public image.
Do you think that with a surge of interested companies, Libra Association will finally get a green signal? Please share your views with us. 
The post 1500 Entities Could Join Libra; EU to Present a Case for Stablecoins at G20 appeared first on Coingape.
Source: CoinGape

Could Tether Be the World’s Most Used Cryptocurrency Ahead of Bitcoin?

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Could Tether Be the World’s Most Used Cryptocurrency Ahead of Bitcoin?
Research and analysis reveal that Tether could be the world’s most used cryptocurrency for months now because its daily and monthly trading volumes surpass those of Bitcoin by far.
Could Tether Be the World’s Most Used Cryptocurrency Ahead of Bitcoin?

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Source: CoinSpeaker

ECB Focuses On The Good Side Of Libra During Latest Hearing

The European Central Bank (ECB), in their latest hearing of Benoît Cœuré organized by the committee on the Digital Agenda on the topic of Digital currencies majorly focused on Libra. The testimony of Cœuré, Member of the Executive Board of the ECB, contained useful information as to the importance of a payment system like Libra and other similar initiatives, collectively known as stablecoins.
Libra And Stablecoins Initiative Designed To Solve Pertinent Issues
According to the report of the testimony, the current financial policies surrounding traditional banks are being disrupted from all sides. First, by tech start-ups and then by big tech firms that have a substantial digital footprint, whose business propositions have been so far based on non-financial activities.
Furthermore, as the traditional financial systems undergo active technological advancement, major problems are yet to be addressed; access and cross-boarder retail payments. It is on this premise that payment systems Libra was said to be of major importance.
The testimony of Cœuré expressed the fact that while stablecoins are specifically designed to fulfil one more of the problems described, Libra was designed to efficiently solve those pertinent issues. According to the report,
“A number of so-called “stablecoin” initiatives, backed by large technology or financial firms and built on blockchain technology, are designed to address at least one and, in the case of Libra, both of these failings. Although private digital forms of money have been around for decades, these new initiatives have access to large networks of existing users and customers, which suggests that they could be the first to have a truly global footprint.”
Problems Posed By Libra And Similar Currencies
However, there are major concerns around the adoption of Libra and other stablecoins initiatives. According to the hearing, stablecoins maintain substantial challenges across a broad range of policy domains. Top consideration issues include the possibilities of money laundering and financing of terrorism. Also, consumer and data protection, cyber resilience, fair competition and tax compliance. According to the hearing,
These initiatives raise formidable challenges across a broad range of policy domains. Of particular concern are the risks related to anti-money laundering and countering the financing of terrorism, as well as consumer and data protection, cyber resilience, fair competition and tax compliance.
Regulatory Effort To Globally Adopt Stablecoins
The committee further discussed regulatory procedure necessary to improve the adoption and use of Libra and other stablecoins initiatives. According to the hearing, in response to these concerns, an active group has been delegated by G7 finance ministers and central bank governors in order to examine global “stablecoins” into details.
The group is also expected to design and present policy recommendations during the IMF-World Bank Annual Meetings in October this year. The Financial Stability Board has also started looking into the regulatory implications of these initiatives and is expected to report to G20 ministers and governors.
The post ECB Focuses On The Good Side Of Libra During Latest Hearing appeared first on Coingape.
Source: CoinGape

Binance Will List Its Binance USD (BUSD) Stablecoin Next Week

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Binance Will List Its Binance USD (BUSD) Stablecoin Next Week
Binance announced the listing of its USD-backed stablecoin BUSD. According to the announcement by Binance CFO Wei Zhou and Richmond Teo, Co-Founder and CEO Asia of Paxos Trust Company, BUSD will become available to public next week.
Binance Will List Its Binance USD (BUSD) Stablecoin Next Week

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Source: CoinSpeaker

China’s Central Bank Focuses on Development of Its Own Virtual Currency

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China’s Central Bank Focuses on Development of Its Own Virtual Currency
China’s Central Bank now wants to develop a virtual currency to compete with the recently unveiled Facebook’s Libra aiming to gain the lead in the development of the cryptocurrency and blockchain technologies.
China’s Central Bank Focuses on Development of Its Own Virtual Currency

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Source: CoinSpeaker

SEC Clears Blockchain Gaming Startup Pocketful of Quarters to Issue ‘Quarters’ Token

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SEC Clears Blockchain Gaming Startup Pocketful of Quarters to Issue ‘Quarters’ Token
The U.S. Securities and Exchange Commission (SEC) has approved the first-ever Ethereum token sale from blockchain-based gaming startup Pocketful of Quarters (PoQ).
SEC Clears Blockchain Gaming Startup Pocketful of Quarters to Issue ‘Quarters’ Token

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Source: CoinSpeaker

Goldman Sachs Might Launch Its Own Cryptocurrency

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Goldman Sachs Might Launch Its Own Cryptocurrency
In recent French news, Goldman Sachs CEO, David Solomon, revealed that the company is looking into developing its own cryptocurrency, like JPMorgan Chase. Also, the company is researching asset tokenization and stablecoins as such.
Goldman Sachs Might Launch Its Own Cryptocurrency

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Source: CoinSpeaker

Binance Joins Forces with Paxos for a New Deposit Gateway

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Binance Joins Forces with Paxos for a New Deposit Gateway
Binance and Paxos have entered a collaboration to integrate a new deposit gateway on Binance.com. It will significantly facilitate fiat-to-PAX exchanging procedures.
Binance Joins Forces with Paxos for a New Deposit Gateway

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Source: CoinSpeaker

StableUSD Becomes the First Stablecoin Listed On Binance DEX

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StableUSD Becomes the First Stablecoin Listed On Binance DEX
StableUSD, a stablecoin created by Seattle-based venture-capital backed startup Stably, has just become the first stablecoin listed on Binance DEX.
StableUSD Becomes the First Stablecoin Listed On Binance DEX

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Source: CoinSpeaker

Max’s Corner: Slouching Towards Silicon Valley

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Max’s Corner: Slouching Towards Silicon Valley
This edition of Max’s Corner analyzes the controversy surrounding the changes to Google’s search algorithm, the plight of the Silk Road founder and the latest on Facebook’s crypto project.
Max’s Corner: Slouching Towards Silicon Valley

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Source: CoinSpeaker

Nornickel’s Crypto Tokens Will Be Launched by the End of This Year

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Nornickel’s Crypto Tokens Will Be Launched by the End of This Year
Norilsk Nickel’s Stablecoin backed by contracts for palladium and nickel trading, is planned for launch by the end of 2019. The pilot project will be rolled put in partnership with IBM and Hyperledger Fabric.
Nornickel’s Crypto Tokens Will Be Launched by the End of This Year

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Source: CoinSpeaker