Unlike social media platforms or ridesharing applications, payment systems cannot be designed as they develop, due to the nexus with consumers’ financial security. This is why in many jurisdictions, including the European Union, there is a regime to oversee retail payment systems. Without requisite safeguards, stablecoin networks at global scale may put consumers at risk.
Cryptocurrencies already pose a number of risks to the financial system, and these could be magnified by a widely accepted stablecoin for general use. Estimated losses from fraud and thefts associated with cryptocurrencies are rising at a staggering pace – from $ billion (1.4 billion euros) in 2018 to over $ billion (3.9 billion euros) in 2019, based on one industry estimate.