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Archive » October 2021 » Stay safe at the intersection: the confluence of big techs and global stablecoins

Stay safe at the intersection: the confluence of big techs and global stablecoins

Fabio Panetta
October 2021 - n. 10
Keywords: Global financial crisis, big techs, global stablecoins
Jel codes: H12, E40, E42

Global finance is showing disruptive changes in recent years. Non-bank financial intermediaries are growing rapidly. Digitalisation is challenging banking, and decentralised financial platforms are spreading. But two other trends could cause even bigger and riskier changes, if they converge. Big techs or Gafas (Google, Amazon, Facebook and Apple) are gaining ground in payments, loans, liquid assets; while crypto-assets and stablecoins are growing rapidly. If big techs start issuing stablecoins, the two trends would meet, altering global financial markets. Risks of contagion and volatility are becoming stronger. Big techs have access to data from a large customer base and edge in artificial intelligence, with a clear advantage over banks. This could allow them to challenge banks’ traditional role, with risks of dominance and abuse market power, altering the process of money and credit creation. A new cooperation is needed between regulators and supervisors to contain the risks that big techs pose to public goals.

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