Global financial regulators are in danger of failing to keep up with the rapid pace of innovation in the digital payments industry and must accelerate their work on cryptocurrency rules, U.S. financial stability board chairman Randal Quarles said on Wednesday. The FSB is an international body responsible for overseeing the global financial system. Mr. Randal Quarles is also a member of the Federal Reserve.
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Central bank authorities have expressed concern that facebook’s plans to launch its own digital currency, Libra, could weaken the control of sovereigns around the world.
“FSB member states are aware of the pace of innovation in the field of digital payments, including so-called ‘stability COINS’,” said Randal Quarles in a letter to G20 finance ministers and central Banks. “we are determined to accelerate the development of the regulatory and regulatory response necessary for these new tools.”
Randal Quarles said a FSB working group was looking at policies to address the pros and cons of stabilizing the currency. A possible regulatory response will be publicly consulted in April.
Randal Quarles also said in the letter that the g20 should give priority to moving away from Libor and towards safer rates set by central Banks.
Libor will be phased out of the market by the end of 2021, a task that will not be easy, as the interest rate indicator, which is widely used from home loans to credit cards, involves up to $400 trillion worldwide.