Bank for International Settlements Urges Regulation of Private Stablecoins

The CEO of the Bank for International Settlements (BIS), Agustín Carstens, has called for proper regulation of private stablecoins to address risks such as leaks and concentration of economic power following the launch of Facebook’s Novi digital wallet.

Carstens told a virtual conference organized by the Goethe University of Frankfurt that “anywhere stablecoins are issued, they need to be properly regulated to deal with risks.”

He also stated that effective and consistent international policies are necessary.

“Innovators should not fear regulators, but should work with them to make their products healthier and more sustainable”, he added Carstens in a speech aboutDigital currencies and the soul of money”.

Stable cryptocurrencies are digital assets that want to maintain a price without great volatility by anchoring themselves to other safe assets such as the US dollar or other regulated financial instruments.

In this sense, the cryptocurrencies stable”carry on their back or use the credibility of these safe assets”, indicated Carstens, who was governor of the Bank of Mexico.

For this reason, they have achieved great relevance for the financial system in several important economies.

For example, he added Carstens, big tech companies provide 94% of mobile payments in China.

“This trend could be accelerated if one of these companies were to create a dominant, closed ecosystem around its own global stablecoin.”, according to the director general of the BIS, whose headquarters are in the Swiss city of Basel.

Novi is running a digital wallet pilot project in the United States and Guatemala using Paxos to send remittances.

Novi, which is the pilot digital wallet of Meta, formerly Facebook and now the parent of Facebook, Instagram, WhatsApp, to send and receive money, uses the stable cryptocurrency Paxos, the digital dollar, and is available on WhatsApp.

Since the beginning of December, a limited group of people in the United States can use Novi to send and receive money through their chat on WhatsApp.

Paxos is a currency that is based on the Ethereum (ETH) blockchain technology and is pegged to the US dollar.

To sign up for New, you just have to download the Novi application and it will also be available in other Meta applications, such as Messenger.

The issuance of the stable cryptocurrency diem de Facebook, replacing the pound, has been discontinued.