ECB Board Member: Global Stablecoins Pose Risks to a 'Fragmented' Europe

European Central Bank board member Benoit Coeure has warned that global stablecoins remain untested and raise potential risks across multiple policy domains.

Coeure, a member of the ECB's Executive Board, made his remarks at the Joint Conference of the ECB and National Bank of Belgium on Nov. 26, in a speech entitled "Crossing the chasm to the retail payments of tomorrow."

Coeure's speech was focused on the failure to establish a pan-European, market-led solution for digital retail payments.

Notwithstanding progress with back-end initiatives like SEPA and the TARGET Instant Payment Settlement system, no pan-European solution has made equivalent progress in point-of-sale and online payments, he said.

Twenty years after the introduction of the euro, this failure to harmonize cross-border payments services has spurred consumer interest in faster and cheaper alternatives and new ecosystems.

"Global stablecoin arrangements raise potential risks across a broad range of policy domains, such as legal certainty, investor protection, financial stability and compliance with anti-money laundering requirements. Public authorities have made clear that the bar will be set very high for these stablecoin initiatives to be allowed to operate."

Couere continued to underscore that dependence on non-European global players generates a strategic risk to the "Autonomy and resilience of European payments systems."

Coeure further noted that central banks will need to adapt their policies and instruments to respond to new consumer protection and monetary policy transmission challenges as emerging technologies reshape consumer payment behavior.

Potential central bank-led initiatives should not crowd out private-sector players seeking to develop fast and efficient retail payments in the euro area, Coeure stressed.

As Cointelegraph reported, Couere has consistently taken a circumspect line regarding global stablecoin payments systems, the discussion of which has intensified since Facebook unveiled its Libra project.