Comparing Libra to central bank-issued digital currencies (CBDC), Beau said the yet to be launched coin “may achieve significant market power, thus posing risks to security and financial stability.”

A French central banker is calling for a global regulatory framework on crypto assets.

In a speech at an Official Monetary and Financial Institutions Forum (OMFIF) meeting in London on Tuesday, Denis Beau, a deputy governor of Banque De France, said:

“There is indeed a need for overall consistency to prevent regulatory arbitrage under the ‘same activities, same risks, same rules’ principle.”

And the only way to ensure that, he said, is with a standardized regulatory regime.

The comments come as Libra, the Facebook-led digital currency project, has raised the ire of regulators and central banks as a threat to the financial world order.

Beau did not offer any direct answers to Libra’s challenge, other than to note the need for global regulations and hopes that central banks will experiment with CBDCs of their own.

He was bullish on the technology. In a global financial ecosystem reliant on costly, and often cumbersome, money transfer mechanisms, Beau said that distributed ledger technology “could help remedy” many of the current issues.

But tokens available today cannot fill that niche, he said. Cryptocurrencies are generally too volatile and pricey to transfer funds effectively and lack the government backing he said is necessary to become a trustworthy store of value, Beau said.

“They can also bring material risks to our payment systems which, if unaddressed, might introduce new sources of fragmentation, instability and fraud.”

That should give central bankers reason to consider new ways to offer their money supply, he said.

“The potential role of a wholesale CBDC is, in my view, worth considering, if not desirable.”

Former US Congressman Calls for Nuanced Cryptocurrency Regulations

Former United States Representative Harold J. Ford has argued that Congress should have a nuanced approach to regulating cryptocurrencies.
In an article published on CNBC on Sept. 5, Ford said that lawmakers and regulators should develop clear regulations toward digital currencies. He noted a comment from Chris Larsen, the executive chairman and co-founder of blockchain startup Ripple, who asked Congress, “Please do not paint us with a broad brush”, when referring to the crypto industry.

Separate crypto from Libra

Ford specifically addressed the issue of social media giant Facebook and its not-yet-released Libra stablecoin. Ford urged lawmakers to separate the cryptocurrency industry in general from the Facebook matter.

According to the former Democratic congressman, the lack of regulatory clarity is already causing harm to innovation in the U.S., further noting that some other countries such as Belarus, Malta, Bahrain, and Gibraltar are already working on regulatory frameworks that are attractive to crypto and blockchain projects. Ford stated:

“The U.S. should not be losing the competitive edge on attracting this innovation’s best and brightest. The SEC now has the opportunity to take the lead on regulation that works with industry, not against it.”

Earlier in September, the Financial Integrity Network (FIN) – a Washington D.C.-based advisory firm – urged Congress to regulate firms in the cryptocurrency sector under the Bank Secrecy Act (BSA).

FIN’s vice president for product development and services, David Murray, noted that some virtual asset service providers are currently regulated as money transmitters under the BSA, while others are not regulated at all.

In late August, Rep. Maxine Waters, chair of the U.S. House of Representatives’ Financial Services Committee, said the committee will continue to review Libra and the corresponding digital wallet Calibra.

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