GCO, a new project led by former employees of JPMorgan, Intel and TrustToken, said that it plans to make the stablecoin model available to a worldwide network of partners, to focus on the possibility for end users to move between cryptocurrencies and fiat.
The Global Currency Organization (GCO) is launching a new U.S. dollar-backed stablecoin, dubbed the USD Digital (USDD).
The new product was announced in an Oct. 1 news release shared with Cointelegraph.
The San Francisco-based team said that they decided to launch the organization “to focus on bridging the gap between traditional and decentralized finance.” Joe Vellanikaran, CEO of GCO, added:
“We are excited to introduce a stablecoin that is providing an institutional-grade digital currency to everyday traders. We set out to make the benefits of blockchain available to all, a vision that is bigger than any one company. We are thrilled to be releasing USDD and opening up the GCO network to institutional partners worldwide.”
Vellanikaran further stated that thanks to the popularity of stablecoins such as USDC and GUSD, investors are now realizing just how important collateralization in the blockchain space is, adding:
“With USDD, we are taking the stability and security of a fully-backed stablecoin and opening it up to a global network of partners. This is the next evolution of the stablecoin industry.”
European Central Bank’s warning
Cointelegraph reported previously that Benoit Coeure, a board member of the European Central Bank (ECB) said that stablecoins could pose a serious risk in relation to public policy priorities, adding:
“Stablecoins are largely untested, especially on the scale required to run a global payment system. … They give rise to a number of serious risks related to public policy priorities. The bar for regulatory approval will be high.”
Financial Stability Board: Stablecoins ‘May Pose Regulatory Challenges’
Randall Quarles, chair of the Financial Stability Board (FSB), has claimed that the potential scale of stablecoins such as Facebook’s Libra could present future “regulatory challenges.”
Quarles voiced his opinion during a presentation at the European Banking Summit in Belgium on Oct. 3.
FSB leads G20’s work on stablecoins going forward
Quarles specifically highlighted yet unreleased Libra stablecoin as the catalyst that has significantly increased public interest in the subject. This could potentially bring a new scale and scope to the space, which the financial regulatory community must carefully consider. Quarles stated:
“Although there is a small risk to financial stability today, there is no doubt the potential scale of stablecoins and other crypto-assets yet to emerge may pose regulatory challenges.”
The G7 is currently finishing a preliminary investigation into stablecoins, and the G20 has asked the FSB to lead this initiative going forward.
FSB pivots from reactive to proactive efforts
The FSB, like Bitcoin, was created in the wake of the 2008 global financial crash, aiming to implement standards that could ensure that such an event could never happen again.
Now 10 years old, the board believes that the reforms it has introduced have led to a stronger, more resilient global financial system, which will reduce the likelihood and severity of potential future crises.
The United States House Financial Services Committee has reportedly also requested that Facebook CEO, Mark Zuckerberg, gives his testimony on Libra before January 2020.
