“Stablecoins” so far not suitable substitutes for money: ECB president

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Stablecoins and crypto-assets are not designed in ways that make them suitable substitutes for money based on analysis so far, Mario Draghi, the president of the European Central Bank (ECB) said in a letter published by the bank on Friday.
In his letter addressed to Eva Kaili, member of the European Parliament, Draghi said the the European System of Central Banks (ESCB) has been closely monitoring innovation in the financial sector and is analyzing crypto-assets and stablecoins with regard to their implications in monetary policy, payments and market infrastructures, and financial stability.
“Thus far, stablecoins and crypto-assets have had limited implications in these areas and are not designed in ways that make them suitable substitutes for money,” Draghi said.
But Draghi added the assessment may be subject to change given rapid technological development and business model evolution, citing stablecoin arrangements such as Libra that could have the potential for widespread adoption in retail and wholesale payments.
Draghi also said that the ESCB is analyzing the opportunities and challenges associated with making a digital form of the euro, but noted that the key issue for a central bank digital currency is not the technology but rather its utility in terms of costs and benefits to the public.


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