MNI BRIEF: Stablecoins Bring Instability In Stress - Schnabel

Stablecoins could amplify financial instability in times of financial stress, European Central Bank Executive Board member, Isabel Schnabel said Friday, as she called for more regulation into the non-bank financial sector.

“Governments should resist the race to the bottom for banking regulation. Now is not the time for de-regulation,” Schnabel told a valedictory event for former DNB head Klaas Knot,, arguing not only of the potential costs of doing it in the form of financial instability but also of the potential benefits.

Banking regulation post the 2008 Global Financial Crisis might not be perfect, but has delivered a framework and has helped to contain potential risks in the financial system, she added.