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The European Central Bank has once again warned of possible risks posed by the stablecoin Libra from Facebook. The ECB has presented three options for the possible development of the project. Libra may become a popular means of payment, a regulated store of value, or it will not be regulated at all. The ECB recognizes the latter as the most dangerous scenario.
The ECB is concerned that the technological, legal and operational qualities of stablecoins ensure that asset management is not subject to current regulations. As a result, users, according to the bank, remain unprotected.
According to the ECB, circulating funds in Libra could reach 152 bln euros. Given the fact that many investors prefer stablecoins backed by fiat rather than cryptocurrencies with high volatility, Libra may become one of the largest and popular investment funds. If Libra needed to offload the large amount of assets, it could cause imbalance in the European market — therefore, the ECB once again calls for the development of a clear regulation for stablecoins.
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