The Bank of England (BoE) head, Andrew Bailey, has called on financial regulators to keep ahead of the curve when it comes to new technologies such as stablecoins and crypto-assets to prevent monetary policy destabilisation and money laundering. His warning comes with technologies such as Facebook’s Libra in mind.
Speaking at the Brookings Institution on Thursday, Bailey said that existing regulations need to be re-examined and updated to account for stablecoins. He also said that the G20 countries need to issue a clear mandate for standards bodies to refresh and clarify standards. He was quoted as saying:
“If stablecoins are to be widely used as a means of payment, they must have equivalent standards to those that are in place today for other forms of payment types and the forms of money transferred through them.”
According to Bailey, any issuer of a stablecoin based on pound sterling would also need to be based in the U.K. adding that such a stablecoin should also meet standards like those applied to banks. In the case of Libra, which is based on a basket of currencies, this could be an issue.
Given the comments from Bailey, Libra may be forced to drop pound sterling from its currency basket or set up shop in the U.K. to meet the requirements of any new regulation. At the current time, however, these ideas are still being discussed and it could take months or years before what Bailey is talking about is implemented.