(14 April 2020) So-called “stablecoins”, like other crypto-assets, have the potential to enhance the efficiency of the provision of financial services, but may also generate risks to financial stability, if they are adopted at a significant scale. While such financial stability risks are currently limited by the relatively small scale of these arrangements, this could change in the future. Stablecoins are an attempt to address the high volatility of “traditional” crypto-assets by tying the stablecoin’s value to one or more other assets, such as sovereign currencies. They have the potential to bring efficiencies to payments (including cross-border payments), and to promote financial inclusion. If widely adopted, however, a stablecoin could become systemically important in and across one or many jurisdictions, including as a payments infrastructure. Ensuring the appropriate regulatory approach within jurisdictions and internationally will therefore be important.
Against this background, the G20 mandated the FSB in June 2019 to examine regulatory issues raised by ”global stablecoin” arrangements (GSCs) and to advise on multilateral responses as appropriate, taking into account the perspective of EMDEs. In February 2020, the G20 reiterated the importance of evaluating and appropriately addressing the risks of GSC arrangements before they commence operation and supported the FSB’s efforts to develop regulatory recommendations with respect to these arrangements.
In response to these requests, this consultative document proposes 10 high-level recommendations that are addressed to authorities at jurisdictional level to advance consistent and effective regulation and supervision of GSC arrangements. This document also highlights key international financial regulatory standards from BCBS, FATF, CPMI and IOSCO that could apply to GSCs. These recommendations focus on financial regulatory and supervisory issues relating to privately-issued GSCs predominately intended for retail use. Wider issues such as monetary policy, monetary sovereignty, currency substitution, data privacy, competition, and taxation issues are beyond scope. .….
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