G20 sets ground rules ahead of Facebook’s Libra stablecoin

The world’s leading economies need to plug gaps in their rulebooks to avoid digital currencies like Facebook’s planned Libra stablecoin from undermining financial stability, the Group of 20 Economies’ (G20) regulatory watchdog said on Tuesday.

Stablecoins are tied to a traditional currency or basket of assets, and used for payments or storing value.

The G20’s Financial Stability Board (FSB) set out 10 recommendations on Tuesday for a common, international approach to regulating stablecoins, prompted by social media giant Facebook proposing its Libra stablecoin.

They should face the same rules as other businesses that present the same risks, regardless of technology used, it said.

Existing financial rules, such as for payments and customer checks, generally apply in whole or in part to stablecoins and address at least some of the risks they generate, the FSB said.