FILE PHOTO: Benoit Coeure, member of the board of the European Central Bank (ECB), pictured during an interview with Reuters journalists at the ECB’s headquarters in Frankfurt, Germany, on May 17, 2017. REUTERS/Kai Pfaffenbach/File Photo
ZURICH/LONDON (Reuters) – A new breed of asset-backed cryptocurrencies, such as Facebook, the Scales have not been tested and is in serious risk, the European Central Bank’s Benoit Coeure said on Monday, pledging to a tough regulatory environment.
Coeure’s comments came during an event at the Bank of International Settlements (BIS) in Basel, where the Group of Seven, the work of the group of the so-called stablecoins are meeting to discuss legal issues related to the digital currency.
“Stablecoins have been largely untested, especially on the scale that is required for the execution of a global payment system,” said Coeure, who is the chairman of the BIS-hosted Committee on payments and market infrastructures. “They will give rise to a number of significant risks relating to public policy priorities. The bar for approval is going to be.”
Facebook is scheduled to Scale, it is the most well-known of the stablecoins, cryptocurrencies are usually supported by a wide range of assets, as well as the traditional cash deposits. These digital coins are designed to overcome the wild fluctuations in price that have made bitcoin impractical for commerce and payments.
The world’s largest social media network, announced plans in June to launch the new currency, as it expands into e-commerce, but the Scale has come under fire from regulators around the world are concerned about the impact on the financial system and its potential for use in money laundering.
David Marcus, Facebook’s top executive overseeing the project, send a tweet, after Coeure’s comments in that Scale, it would continue to engage with central banks, regulators, and legislators to address concerns.
Report by John Miller in Zurich, and Tom Wilson in London; Editing by Michael Shields and Pravin Char