Raphael Auer, 27 April 2020

The rise of stablecoins and asset-backed tokens could drive the development of financial markets via new forms of transparency and data credibility. This column uses the revised proposal for the Libra global stablecoin as an example to illustrate possibilities for supervisors to harness information in distributed ledger based-finance via ‘embedded supervision’. The aim is to increase the quality of data available to supervisors and to reduce administrative costs for firms. 

Barry Eichengreen, Ganesh Viswanath-Natraj, 25 April 2020

Earlier this month the Libra Association issued a new White Paper updating its paper of June 2019.  This column argues that while the authors of the paper now understand that to succeed, their project must address economic and political concerns, they have done nothing to address worries about currency substitution.  A new proposed capital buffer is underspecified.  A key market in Libra futures or forwards is missing, as is a Libra lender of last resort.

Erik Feyen, Jon Frost, Harish Natarajan, 16 January 2020

Proposals for global stablecoins have put a welcome spotlight on deficiencies in financial inclusion and cross-border payments and remittances to emerging market and developing economies. This column, part of the Vox debate on digital currencies, argues however that stablecoin initiatives are no panacea. Moreover, they pose particular development, macroeconomic and cross-border challenges for emerging market and developing economies. It remains to be seen whether stablecoins can offer a decisive comparative advantage over fast-moving fintech innovations in these countries that are built on or improve the existing financial plumbing.

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