In 2019, Facebook unveiled its Libra project that consisted of issuing stablecoins pegged to several currencies, claiming cheap and efficient payment solutions (including for cross-border payments) and greater financial inclusion. Around the same time the strange word "cryptocurrencies" appeared, a word that hurt the ears of politicians and central bankers. From time immemorial, money had been sovereign in order to be reliable and lasting. B. Disappointing learning years? Needless to say Libra had its risks. I will not list them all, but it raised very significant concerns about financial stability, money laundering, etc. The issues at stake reached far beyond mere financial regulation, and also included more acutely than ever the question of competition. This is when big techs entered their learning years in finance, confronting reality. Libra did not materialise, even after it was adjusted and rebranded as Diem. Existing stablecoins are issued by players other than big techs, mainly from the digital asset industry. Incidentally, after the failures and/or crimes committed by some of them, it is high time to regulate cryptos in full and to require licensing. Let us not kid ourselves into believing that we can count on the so called "crypto winter " which has actually lasted for over a year now, to make the problem disappear by itself. That would be a dangerous illusion and would further delay supervision that is so badly needed.v All jurisdictions agree in principle to regulate, under the common FSB umbrella.
The Riksbank has collected data on thousands of individual households’ finances from Statistics Sweden for several years now. These statistics show that the households with the largest debts also have the highest incomes and the largest wealth. We have also examined what would happen to households’ ability to pay if unemployment or interest rates were to rise. The overall assessment is that households at present cannot cause loan losses to such an extent that the stability of the banking system would be threatened. However, even if the household sector’s ability to pay on the whole is good, there is of course a risk that individual households will borrow too much and may experience payment problems. With regard to financial stability, I see no serious risks in the growing household indebtedness and rising property prices. Are there any risks with regard to the inflation target? This question is slightly more difficult to answer. How developments in the asset markets, such as the housing market, will affect monetary policy for a central bank with an inflation target is a subject debated all over the world by academics and economic decision-makers. The problem can be formulated roughly as follows: The increases we have seen in household indebtedness are not sustainable in the long term; household debts cannot grow twice as fast as incomes over long periods of time.