Moorwand, a payment solutions provider and BIN sponsor, has launched a new whitepaper that delves into the threat that stablecoins pose to the global financial system.
Authored by Robert Courtneidge, CEO of Moorwand and claimed to be a top 10 payments lawyer, the paper is a meta-analysis of over 20 reports on the issue of stablecoins.
This includes: FATF’s “Guidance on virtual asset service providers”, the FCA’s final “Guidance on Cryptoassets” and BIS’s “Big Tech in Finance: Opportunities and Risks”.
“Since it was announced on the 18th of June 2019, Facebook’s Libra has received widespread attention partly due to its promise to become a true global digital currency,” commented Robert Courtneidge CEO, Moorwand.
“However, regulators are not being prepped to manage the challenges posed by Libra and other stable coins. Stable coins, delivered by ‘Big Tech’, are being given a free pass by regulators but must be held to the same standards as a bank or payments firm if they are to operate in the same space.”
Courtneidge breaks down the possible threats that stem from stablecoins and provides recommendations for regulators in their approach to legislation.
All recommendations either abide by existing law or offer new principles to keep innovation and competition rife between ‘Big Tech’ companies such as Amazon and traditional financial service providers.
In a recent two part feature on PaymentExpert four industry figures breakdown the impact of ‘tech giants’ on traditional banking services.
Moorwand’s whitepaper also covers the evolution of crypto-based assets plus other issues surrounding the relationship between the global financial system and new, possible industry-changing digital innovations.
“Libra for example raises a number of concerns, one major issue being Facebook’s sheer determination to find a host nation that will let it operate to its own advantage,” continued Courtneidge.
“Without a global regulatory response, Libra will be able to function as freely as its host nation’s regulatory environment.
“Ultimately, if we are serious about holding ‘Big Tech’ to the same standards as the rest of the finance industry, then we must act.
“I believe this white paper sets out a clear set of recommendations for regulators to tackle the challenge of stable coins without quashing the innovations from crypto firms and ‘Big Tech’ players.”