Law Decoded: The rivalry between central banks and global stablecoins, Oct. 9-16

Published on by Cointele | Published on

Some central banks had already begun work on their own digital currencies, but over the next year the U.S., EU, China, Japan and Great Britain - which issue the five leading currencies in the world - would all have active research into the subject of a CBDC. But while governments are trying to keep up in the race to upgrade their own currency, they remain suspicious of private entities like Facebook challenging them.

The G20's financial watchdog, the Financial Stability Board, published new guidance warning governments as to the dangers that global stablecoins pose to monetary sovereignty.

These announcements are not aimed at crypto writ large.

European Central Bank dodges commitment to a digital euro.

After pointing to crypto's legendary volatility as a difference, the announcement turned to stablecoins, saying they they lacked the backing of a central bank.

While the invitation to consultation did not many specific claims as to the mechanisms behind a digital euro, the ECB is clearly doing its best to distance its project from stigma associated with crypto.

It's obviously under consideration, otherwise the bank would surely point to lack of a blockchain as a real, substantive distinction between crypto and its envisioned euro, but it's also true that the word blockchain is still subject to a lot of the same stigma and skepticism that drew the ECB to draw distinctions with crypto in the first place.

The ECB's breakdown of priorities for a digitized euro is clearly fixated on deciding between privacy, speed, offline utility and security - the classic tradeoffs of crypto.

Not to be outdone, the Central Bank of Russia released a public consultation remarkably similar to the ECB's, both in its concerns for a digital ruble and in avoiding mention of blockchain technology.

The ruble is not the global currency that the euro is.