Global monetary watchdog, the Financial Action Task Force (FATF), has added its voice to the growing chorus of concerns over Facebook’s Libra and other stablecoins.
Mass adoption of such currencies could hinder efforts to detect and stamp out money laundering and terrorist financing, Reuters reported on Oct. 18.
Managing the potential risks of mass adoption
Speaking to reporters in Paris, FATF president Xiangmin Liu said that both stablecoins — and the companies behind them — would be subject to global standards on cryptocurrencies and traditional financial assets:
“If stablecoins were to become widespread, it could potentially lead to new risks regarding money laundering and terrorist financing […]. It is our job to ensure the new risks in connection with stablecoins will be adequately addressed.”
Everybody hates Libra
Stablecoins have existed for several years, although it is only Facebook’s June announcement of Libra that has attracted increased scrutiny as of late.
Authorities around the globe have raised concerns about Libra, from money-laundering issues to undermining and posing a threat to national currencies. Facebook, in particular, is seen as having the reach and profile to finally bring stablecoins and cryptocurrency into the mainstream with its billions of users worldwide.
Earlier today, a task-force from the G7 group of countries released its full report on the potential impact of global stablecoins.