Fed's Brainard: Stablecoins like Libra could 'put consumers at risk' without safeguards

U.S. Federal Reserve Governor Lael Brainard said on Wednesday that Facebook’s proposed cryptocurrency Libra must overcome “a core set of legal and regulatory challenges” before it can be launched as a global stablecoin. 

According to Brainard’s draft remarks for a Frankfurt conference, stablecoins issued on a smaller scale –including Gemini and Paxos, among others – already exist. But the risks associated with Libra are particularly high due to the project’s proposed scale and speed of adoption, as well as its chief backer, the social media giant Facebook.

Almost one-third of the world’s population are active users on Facebook, she said, and Libra’s potential adoption would fundamentally transform the global payment system.

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