Xiangmin Liu, president of the Financial Action Task Force (FATF), the global money-laundering watchdog, has said that stablecoins, including Facebook’s Libra, could hinder efforts to prevent criminal activities.
“If stablecoins were to become widespread, it could potentially lead to new risks regarding money laundering and terrorist financing,” Liu was quoted as saying in a Reuters report on Friday.
The president added that it is the FATF’s job to ensure that the risks emerging from stablecoins are adequately addressed. Both, stablecoins and its issuers, would be subject to global standards on cryptocurrencies and traditional financial assets, said Liu.
FATF is scheduled to submit a report on stablecoins to finance ministers and central bankers from the Group of 20 (G20) next year, per the report. Last month, Liu said the FATF is closely monitoring Libra.
Just yesterday, the Group of Seven (G7) officially published a report on stablecoins, saying that “no global stablecoin project should begin operation until the legal, regulatory and oversight challenges and risks […] are adequately addressed.