Cryptocurrency won’t wait. That’s the message from Randal Quarles, Chairman of the Financial Stability Board (FSB), an international body that monitors and makes recommendations for the global financial system.
In a letter released on Wednesday, addressed to G20 central bank governors and finance ministers ahead of their meetings in Riyadh, Saudi Arabia on Thursday, Quarles warns that regulators need to stop dragging their feet.
Slow action on digital assets and changes in the global financial system could spell the end of the legacy edge over powerful tech giants, such as Facebook, that are swiftly moving into financial services.
Instead, central banks could increasingly struggle to maintain their monopoly over money. Writes Quarles,
“FSB members recognize the speed of innovation in the area of digital payments, including so-called ‘stablecoins’. We are resolved to quicken the pace of developing the necessary regulatory and supervisory responses to these new instruments…
Cross-border payment systems and so-called ‘stablecoins’ are closely linked. Digital tokens that aim to be payment substitutes have the potential to become globally systemic, not least because they may fill needs not met by existing cross-border payment systems.
Recognizing the importance of efficient and inclusive payment services for global growth, the Saudi G20 Presidency has requested the FSB to coordinate the development of a roadmap for improving cross-border payment systems.”
Despite controversy and criticism, Facebook can harness the power of its two billion users to propel its stablecoin project, dubbed Libra. The social media giant will join a number of stablecoins that are already on the market: Tether, TrueUSD, DAI, USDCoin and Paxos Standard, Stasis Euro, among others. Pegged to fiat currencies and other commodities, stablecoins are cryptocurrencies that can leverage the benefits of blockchain technology to power fast transactions while avoiding exposure to Bitcoin-style volatility.