Bundesbank warns of risks for financial stability through Stable Coins

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Juni 24, 2019

Facebook’s Libra suggests is currently the world’s high waves. Now, the Executive Board of the Bundesbank, expressed on the topic of stablecoins. Burkhard Balz warns of the unpredictability of crypto-currencies for the financial industry. Even for global financial stability, the Banker sees risk. He also stressed the need for more innovative payment methods in institutional financial structures.

From Polina Khubbeeva
24. June 2019BTC$a total of 10,945,00 1.76%part Facebook Twitter LinkedIn xing mail

After in the last days of the ruling and financial officials from around the world to Libra have referred, will report to the Executive Board of the Deutsche Bundesbank word. In a press release on the Bundesbank website, the Banker shows critical of stablecoins. The message from the 21. June bears the title „macro-prudential Policies through the lens of Sherlock Holmes.“ She appeared on the occasion of the 5. annual Macroprudential Conference.

macro-prudential measures will depend on the stability of the financial system as a Whole. So-called capital buffers for system-relevant banks, for example. In principle, the use of financial policy instruments should only be done when the System is in the location, and any necessary corrections, and regulations for yourself to enforce. They are therefore conceived as compensatory measures, the Central banks in financial economically unstable times. In Germany, it is, among other things, the Bundesbank, which decides such macro-prudential measures.

the Bundesbank, refers to crypto in macro-prudential policy, planning,

courtship effort first of all, the metaphor of Sherlock Holmes’ forensic lens, which it is deductive methods of Observation of the reality. In clear text this means: The Bundesbank’s Executive Board calls for to make fiscal policy decisions on the Basis of risk analyses and scientific data.

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in Terms of Distributed Ledger technologies, and crypto-currencies refers to courtship accordingly to potential dangers. These are mainly in the question of how to guarantee the 1:1 coupling of stablecoins. He also discussed the potential macro-prudential responses to the risks outlined in the. A coupling on the trust Fund therefore offers only limited storage capacity and requires global policies for the regulation.

Furthermore, the Bundesbank Executive Board notes that stablecoins can attack the business model of banks, if they find favor with the users. Then you could draw mutual support between Central banks and Stable-Coin-providers (such as Facebook) can be considered. This solution, however, can have in times of crisis, destabilising effects on the money system. The Bundesbank’s Executive Board also refers to the G7 task force on the topic of crypto-currencies. This sets in July when Finance Ministers and Central Bank head meeting in Chantilly a Report to Stable Coins before.

finally, Balz stated that Central banks must follow the call of the time to „cheap, user-friendly and immediate Cross-Border Payments“. „Time real payments in the medium term, to the Standard in Europe.“ After it was in the last days before all Calls to be in control, wants to take the Bundesbank-boss Facebook now so the Wind out of the sails.

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