Implementation of the recommendations on global regulation of stablecoins is still at an early stage, gaps and fragmentation remain. Such conclusions are contained in a new report of the G20 Financial Stability Board (FSB).
Thus, in October 2020, the advisory body responsible for financial regulation formulated ten recommendations for a common international approach to the regulation of stablecoins. A year later, the FSB noted slow progress in their implementation.
“Effective international cooperation and coordination is crucial. Differences in regulatory classifications and approaches at the level of jurisdictions can lead to risks of regulatory arbitration and market fragmentation,” the document says.
Comprehensive management system
The recommendations range from giving the relevant authorities oversight functions for global stable coins to a “comprehensive management system,” since they are linked to fiat currencies.
The International Organization of Securities Commissions (IOSCO) and the Basel Committee on Banking Supervision (BCBS) called the coverage of a number of aspects by various countries. That have begun to develop regulation of stable coins “incomplete”, FSB analysts pointed out.
The report states the need for additional consideration of issues. Such as criteria for compliance with the status of a global stablecoin; investor protection and requirements for issuers; custodians and wallet providers.
The development of standards
Analysts suggested including foreclosure rights, cross-border cooperation and coordination between jurisdictions. As well as mutual recognition in the outline of recommendations.
The FBS plans to complete the development of standards by July 2023.
Recall that in October, the Bank for International Settlements (BIS) published a report with guidance on the compliance of stablecoin mechanisms. With international standards for payment, clearing and settlement systems.