The Financial Stability Board (FSB) says stablecoins have the potential to enhance the efficiency of the provision of financial services. The body adds that the hybrid cryptocurrencies have the potential to bring efficiencies to payments (including cross-border payments) as well as to promote financial inclusion. Yet despite this acknowledgment, the FSB still argues against the widespread adoption of stablecoins claiming they “may generate risks to financial stability, particularly if they are adopted at a significant scale.”
The AML/CFT Argument
In a report, the FSB says activities associated with global stablecoins arrangements (GSA) “pose risks that can span across banking, payments, and securities/investment regulatory regimes both within jurisdictions and across borders.”Predictably, the report states that “depending on the facts and circumstances, specific money-laundering/terrorist financing risks may emerge” with the widespread use of stablecoins.
Interestingly, however, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) reports that “identified cases of laundering through cryptocurrencies remain