The View | Stablecoins must be subject to ‘same business, same risk, same rules’ approach
- Stablecoins could support competition in payments, deploying technology and innovation to reduce cost and offer new services. But when used at scale as a means of payment, they can present material risks to the financial system
- A new report on applying international payments standards to stablecoins is a welcome milestone
Rapid technological change is increasingly spurring private – and often Big Tech-promoted – initiatives throughout the world of finance, particularly in the payments domain. As a result, the global financial system has arrived at a potentially game-changing moment.
Every day, millions of households and businesses, as well as the financial sector, rely on payment systems to transfer funds. These networks are the bedrock of the financial system, supporting virtually every transaction in the economy. If they are disrupted for any reason, or if users lose confidence in them, the impact on financial stability and the real economy can be enormous.
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Chinese e-payment giants WeChat Pay and Alipay enter Malaysia
But, given the stakes involved, such advances must not lead to lower safety standards and higher risks. New payment initiatives should succeed because they offer better service and potentially greater financial access, not because they are able to operate according to lower or no standards.
