Operational systems and controls, including mechanism to protect consumers’ interest and prevent criminal activity, can vary considerably between entities and jurisdictions. With typically hundreds or more money services entities in most countries, such diversity presents a unique set of challenges for money services businesses and regulators seeking to put in place the necessary frameworks to manage and mitigate risks associated with the business. In the more recent period, money services businesses have been confronted with increased challenges from heightened global concerns with crimes committed cross-border and  BIS central bankers’ speeches  1  transnational money laundering. The cash-based nature of MSB transactions, global reach of remittance networks, and customer verification processes, if not properly managed would render MSBs susceptible to money laundering threats. Heightened regulatory scrutiny over money laundering controls and heavy penalties meted out by regulators might prompt banks to review their relationships with MSB companies. Some banks have withdrawn banking facilities provided to MSB companies, creating significant difficulties for large numbers of MSB companies that are doing legitimate business. On the other hand, as the bar is raised for MSBs to strengthen AML procedures, there is a concern over the unintended consequences that this might exclude certain segments of society from access to the formal financial system. Worse, it pushes more transactions to the informal or illegal channels. I raise these observations to highlight two points which I thought are relevant to this Conference.
This is why the  7  All speeches are available online at www.bankofengland.co.uk/news/speeches  7  UK Financial Policy Committee has said that where stablecoins are used in systemic payment chains as money-like instruments, they must meet standards equivalent to commercial bank money in terms of stability of value, robustness of legal claim and the ability to redeem at par in fiat. Stablecoins’ borderless nature of course also means that international regulators’ coordination is necessary and work is indeed underway. A Financial Stability Board consultation is ongoing with supervisory recommendations for global stablecoins, aligned with the Bank’s view on same risk – same regulation. Is there a role for central banks (public money strikes back)? The changes in how we pay I described at the beginning of this presentation have not just involved a switch from physical cash to electronic payment. It has also necessarily involved a switch from public, central-bankissued money to private money. This is because central bank money is currently only available in physical banknotes or in reserves, which certain regulated financial institutions hold in accounts at the central bank. For the public and most businesses, the only current option to hold money backed by the central bank is in the form of physical banknotes. I’ve assumed in the story so far that the cash decline and the rise of online continues the march towards the dominance of private money in our transactions. But is this right?