A stablecoin managed by a big tech company, like Facebook's proposed libra, would raise concerns about data protection and even choke financial innovation, European Central Bank board member Fabio Panetta said on Wednesday.
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“The issues at stake range from data security and compliance with EU data protection law to cutting off the lifeblood of European financial innovation,” Panetta said.
Recently, Central banks set out to regulate cross-border stablecoins like Facebook’s planned Libra with a common approach, saying more rules may later be needed to ensure stability.
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The prospect of a currency-backed stablecoin being used by billions of people on Facebook has galvanised central banks into putting together rules and into considering how they could launch their own digital currency.
Existing national rules do not fully cover stablecoins the Financial Stability Board (FSB) said in a statement, adding that regulators should ensure that global stablecoins are fully accountable, keep data safely, have effective safeguards against cyber attacks and money laundering.
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