July 18, 2019 / 11:14 AM / 5 months ago

ECB's Weidmann: Should be vigilant about stablecoins but not alarmed

FILE PHOTO: German Bundesbank President Jens Weidmann presents the annual 2018 report in Frankfurt, Germany, February 27, 2019. REUTERS/Kai Pfaffenbach

CHANTILLY, France (Reuters) - European Central Bank policymaker Jens Weidmann said on Thursday stablecoins offered prospects for prosperity but users needed to be aware of the risks of using them, adding that only when all questions on them had been cleared up could they go ahead.

“There’s no reason to be alarmed but there’s reason to be vigilant,” Weidmann told a news conference at a meeting of the G7 finance ministers and central bankers.

Facebook’s plans to launch Libra, a digital token backed by four official currencies, have raised concerns ranging from consumer protection to money laundering and even the notion that the traditional monetary system could be disrupted.

Facebook is one of 28 founding members of the Libra Association which will be headquartered in Geneva and which is in talks with Swiss regulatory authorities about a framework.

Reporting by Michael Nienaber; Writing by Michelle Martin; Editing by Madeline Chambers

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