Facebook’s Libra digital currency proposal sent a wake-up call to international regulators, finance ministries, and central bank governors. All of these players have realized that reaching a company across its three platforms can significantly accelerate the adoption of a global stable currency.

In a new Bank for International Settlements document, three analysts suggested that news of the balance and other proposed global-stock coins will require regulators to rethink their ability to monitor and monitor issuance and trading.

According to analysts, the potential of the scale for rapid mass adoption across multiple jurisdictions will require authorities to develop dynamic and adaptive oversight and enforcement tools. Although this is not an easy feat, they have argued that the nature of the digital stack currency itself could provide new enforcement mechanisms:

“Introducing a stable currency is an area in which integrated control can function in practice. Information is a key regulatory function, both for the purpose of improving market performance and efficiency and in terms of oversight, whether it is to ensure market safety, protect customers and investors, or oversee.”
This “internal audit” will make the direct and automated submission of data a mandatory registration requirement for all potential sources of stable funds.

This is indeed true for some of the current volatile digital payment platforms like AliPay and WeChat Pay in China, analysts say.

Stable currencies that use distributed ledger technology can generate secure information and support automatic ledger monitoring, reducing the need for issuers to collect, verify and present data to government agencies.

In general, there are three goals to implement stable, built-in oversight over cryptocurrencies: to reduce compliance costs and thus level the playing field for large and small private players Developing an open source monitoring toolkit that can demonstrate how the rules are enforced; And to ensure the legal final of payments that differ from the financial and contractual end.

After carefully analyzing the various problems presented by this model, the authors argue that the best solution may ultimately be to incorporate the fiat currencies into a similar model.

Central bank digital currencies, or CBDCs, will not represent the same “conflicts of interest” as private accumulation currencies. Therefore, the authors concluded that the stacked coins could be an experimental proposal that shows the path to innovation in the current system, and nothing more:

“Just as coins in previous centuries […] were an evolutionary step towards a central bank, today’s currency piles may eventually give way to other reforms. This could include strong and well-supported alternatives and new central bank connections. Bank money across national borders. “.

Source: CoinTelegraph