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‘Stablecoins” can be a hindrance to the efforts to stamp out money laundering global watchdog

LONDON (Reuters) – The proliferation of cryptocurrencies, such as Facebook, the Scale can have a serious impact on the global efforts to detect and stamp out money-laundering and the financing of terrorism, as a global watchdog on the illicit finance said on Friday.

FILE PICTURE: A 3D-printed Facebook Scale cryptocurrency’s logo is seen in front of the display and German flag on it in this picture, the 13th of September 2019. REUTERS/dado Ruvic

“Stablecoins” digital currencies are usually backed by a traditional money – spark, it could be the mass adoption of cryptocurrencies and peer-to-peer file transfer, and the cutting of the necessity of a regulated and brokers, and to impede efforts to halt the criminal use of the Financial Action Task Force (FATF) has said.

In a comment that underscores the global concern about the emergence of the Scale, the Paris-based FATF said, both on stablecoins, and the companies behind them, they would be subject to the international standards on cryptocurrencies and traditional financial assets.

“If stablecoins were to become widespread, it could lead to a new set of risks related to money laundering and terrorist financing,” FATF president and Xiangmin Liu told reporters, in Paris, france.

“It’s our job to make sure that the risks in connection with the stablecoins will be appropriately dealt with.”

Stablecoins are designed to overcome the wild fluctuations in price that have made bitcoin and other cryptocurrencies is impractical, both for the market and the payment and as a store of value.

Facebook unveiled a pair of Scales, a stablecoin is supported by the existence of separate currencies, the dollar, the euro and the government debt in June as part of its commitment to e-commerce, and global payments.

It says it Scales and that it would be the highest-profile move to drag cryptocurrencies into the mainstream of finance, and of trade, access to financial services in developing countries, and to address the high cost and long transfer time is common in most of the global payment systems.

However, the global regulators and politicians have been concerned about the impact of the launch in June 2020.

The Group of Seven rich nations said on Thursday, stablecoins, such as bathroom Scales should not be allowed to start until the risk they pose have been addressed. When it was launched on a large scale stablecoins could threaten the world’s monetary system and financial stability, he said.

The FATF, a body was launched three decades ago, he said that the report would be on stablecoins to be the finance ministers and central bankers from the Group of 20 developed countries in the next year.

Report by Tom Wilson; Editing by Nick Macfie

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