Policymakers have much work ahead when reviewing cryptocurrencies like the proposed Libra, a European regulator said Wednesday. In related news, a cryptocurrency payment plugin debuts for WordPress.
The Libra cryptocurrency project led by Facebook Inc. has “undoubtedly been a wake-up call for central banks and policymakers,” said Benoit Coeure, a board member of the European Central Bank and chairperson of the ECB’s committee on payments and market infrastructure.
Coeure argued Libra could solve two problems besetting current payments systems globally: lack of access for individual users and inefficiency. However, Coeure repeated previous warnings that Libra must be tested on a large scale in real-world environments before it can be allowed to launch.
Speaking at a hearing of the Committee on the Digital Agenda in the German parliament, Coeure said some of the risk associated with stablecoins like Libra can be addressed by existing regulatory and supervisory protocols. Stablecoins are said to resist volatility because their value is tied to that of a fiat currency, such as the dollar or euro.
“Some aspects may require novel approaches, however. In the European Union, for example, it is the role of the European Commission, together with member states, the ECB and relevant authorities, to review whether the current framework is fit for purpose,” Coeure said in prepared remarks.
For example, anti-money laundering and policies to counter terrorism financing with the new currencies need to be addressed, he said. Other concerns include consumer and data protection, fair competition, and tax compliance.
Legal aspects of these cryptocurrencies need attention, too. “The global nature of these initiatives means that potential conflicts of laws across jurisdictions need to be addressed,” Coeure said. “Ambiguity can make ‘stablecoin’ arrangements vulnerable to a loss of confidence—an unacceptable risk in a global payments system with potentially systemic importance. Given that many of the ‘stablecoins’ target retail users, it is critical that the rights of coin holders and the obligations of issuers be clearly communicated and legally precise.”
In related news, Crypto.com launched its Crypto.com Pay Checkout plugin for WooCommerce, an e-commerce platform on WordPress. The plugin will allow merchants on the platform to accept cryptocurrencies with no fees for the first six months, Hong Kong-based Crypto.com said.
Merchants can accept cryptocurrencies now and instantly convert such funds into fiat currencies, Crypto.com said.
—With additional reporting by John Stewart