The International Organization of Securities Commissions (IOSCO) revealed recently that current security laws could very well be applying to Facebook Libra to help understand its advantages.
The investigation on stablecoins from the international watchdog revealed that these could prove to be potentially beneficial as well as risky for traders.
Stablecoin is a form of cryptocurrency that is backed by reserved assets that can vary from being an actual currency to being a valuable item. Fakebook Libra stablecoin would be tied to bank deposits and government securities for different currencies.
Facebook Libra and troubles with the law
In light of Facebook’s newly found interest in digital currency, Facebook Libra has created a lot of concerns with regard to issues like money laundering and user protection.
The chair of the international watchdog explained that an inspection of the digital currency revealed features on which existing security measures can apply.
The statement sounded a bit subtle in comparison to the policymakers in Europe, who seemed outraged by the idea of libra currency and wanted it banned.
The head of Hong Kong’s security regulation explained that there is a dire need for comprehending the rights and responsibilities given to users.
He went on to explain that to understand the rights and obligations given by a stablecoin; international cooperation is needed to understand the risks and potential benefits of it.
Randal Quarles, chair of FSB and the vice-chair of the Federal Reserve System, are investigating the possibility of regulatory gaps around global stablecoins.