The Financial Stability Board (FSB) stressed the importance of properly regulating, overseeing and monitoring this industry, noting that the stablecoin world is “evolving rapidly.”
Global stablecoin regulations since last year The Financial Stability Board, which has prepared an assessment report at the request of the G20 on how it is progressing, published the results of the report on Thursday.
The FSB states that national regulators can rely on stablecoins when regulating them. 10 items had prepared a list of suggestions and announced it in October 2020.
Established as the successor to the Financial Stability Forum after the G20 summit in 2009, the Financial Stability Board coordinates the work of national financial authorities and international standard-setting institutions.
In the evaluation report, it was stated that many countries different ways still in terms of the implementation of this 10-item list, which was followed last year and was recommended last year. “in the early stages” has been stated.
“For example, the European Union is preparing a comprehensive new regulatory framework for stablecoins and other cryptoassets. Other authorities, such as Canada and the Cayman Islands, continue to evaluate how to respond or are in the early stages of establishing a new regulatory regime. More authorities, including the US, Switzerland, Thailand and Turkey, rely heavily on existing regulation, supervision and oversight regimes to address risks associated with stablecoins.”
Emphasis was placed on the importance of international cooperation
The Financial Stability Board states that stablecoins, which act as a bridge between traditional fiat currencies and crypto assets, are used in decentralized finance structures and are the underlying asset in crypto-asset derivative transactions, are generally “a side effect of the demand for speculative cryptoassets” that and “restricted” states that it has a usage area.
Today’s stablecoins that are “not used at a significant scale in mainstream payment transactions” Ease of Use It is envisaged that it can spread to wider audiences with:
“If a stablecoin enters the financial system as a payment instrument used in more than one (country) jurisdiction a global stablecoin and financial stability compared to existing stablecoins. much greater risks contains.”
The laws that vary between countries, to regulatory arbitrage While it is stated that it may cause “All authorities responding to the FSB’s[recommendations]are committed to meeting the international challenges posed by global stablecoins. to cooperate at the international level stressed its importance.” expression was used.
National authorities in communication with the Financial Stability Board; It also proposes international cooperation in determining the redemption rights, in terms of conditions for global stablecoin issuers, custodians and providers, to qualify a crypto asset as a stablecoin.