Whether or not a banking licence is required, stable coin issuers must abide by certain regulations just like any other financial market participant. These range from investor and data protection to rules on combating money laundering and terrorism financing. As you see, ladies and gentlemen, stable coins present many regulatory challenges, which in turn require close cooperation between the various authorities. This is particularly true of cross-border projects like Libra. In addition to the regulatory issues, there is the question of whether stable coins might influence the effectiveness of monetary policy. If Swiss franc stable coins were to proliferate in Switzerland, this would have no immediate impact on the effectiveness of our monetary policy. In such a scenario, the Swiss franc would remain the relevant currency. The stable coins pegged to Swiss francs would simply be another Swiss franc-denominated form of money alongside bank deposits and cash. As long as prices, wages and loans are set in Swiss francs, the SNB can influence incentives for savers and borrowers via its monetary policy and thus ensure price stability over the medium term. However, if stable coins pegged to foreign currencies were to establish themselves in Switzerland, the effectiveness of our monetary policy could be impaired. How close stable coins will get to good money and what additional benefits they will offer versus traditional types of money remains to be seen. What matters is that the various book and token money providers operate under identical competitive and regulatory conditions.
But there is much to suggest that fiscal policy as early as next year that is, the policy which is being decided this autumn - will be important in this context, at least if the timing that is now being discussed, with full participation in 2005 or 2006, is achieved. Thus, more and more of stabilisation policy's burden is transferred to fiscal policy. But this does not mean that the Riksbank should refrain from using the scope for monetary policy that may exist during the ERM2 period. It is up to the Riksbank to do what is possible to make Sweden's accession to the monetary union smooth and stable. Low and stable inflation in Sweden is one important element here; another is a stable exchange rate. Sweden must fulfil the convergence criteria in both these respects. In practice this means that there may be grounds for continuing to produce inflation forecasts and to publish Inflation Reports in much the same way as at present. We should also do what we can with the interest rate to direct inflation onto our target. But the closer we come to adopting the euro, the smaller will be our repo rate's effect on longer term interest rates. That is because as the entry date approaches, the Swedish yield curve will be increasingly determined by European interest rates. BIS Review 65/2002  5  The fact remains that exchange rate stability is one of the convergence criteria for Sweden's full participation in the monetary union.