Bitcoin and other early-currency crypto were ultimately not “attractive means of payment or value for money,” according to a new report by G7 and the Bank of International Settlements (BIS).
However, the October report said that cryptocurrency or stablokines related to widely adopted assets, such as Libra, pose a growing threat to monetary policy, financial stability and competition.
The Stablockine findings presented in the Global Stabilization Report have the potential to reach an international audience and have “significant negative effects” on the current economic system.
At the same time, “[first-generation cryptocur currencies like Bitcoin] have experienced, among other challenges, extremely volatile prices, scalability, complex user interfaces, and governance issues. Thus, cryptocurrency has been a more speculative asset class for certain investors and engaged in illegal activity than payment methods. ”
Stabecoin’s taxonomy – defined as the value of money, contract or property claims, or the right to object to a property issuer – remains the main legal question at this stage, the report continues.
While stablecoin may offer faster, cheaper and inclusive payments, they can only be implemented “if significant risks are regulated.”
According to the footnote, the G7 report states that the Liberal Association of the Swiss Financial Supervisory Authority (FINMA), subject to regulatory considerations in Geneva, agrees with the G7’s Stabilokin recommendations.
FINMA recently stated that Libra emphasized the need for international coordination and “appropriate due diligence” for all the services offered by the payment system.
The Stubkins report was prepared at the July G7 request, with the immediate release of Libra in June.