The Financial Stability Board (FSB) issued high-level suggestions for the regulation and monitoring of global stablecoin (GSC) arrangements two years ago, which the G20 supported. It revised earlier GSC suggestions today and released a similar list of crypto-asset advice, soliciting comments.
According to the FSB’s investigation, most stablecoins do not follow the criteria and must enhance their governance, risk management, redemption rights, stability procedures, and disclosures.
The crypto meltdown sparked by the collapse of the Terra stablecoin and the temporary de-pegging of the largest stablecoin, Tether, has influenced some new suggestions.
Currently, cryptocurrency exchanges are the major wallet providers, and FBS has seen that some of the exchanges are affiliated with certain stablecoins like Coinbase with USDC, and Binance with BUSD. However, the issuing is distinct from the exchanges. Circle issues USDC, whereas Paxos issues BUSD.
The FSB is worried that wallet providers may be involved in stablecoin issuance as well as off-chain transactions without adequate controls.
Another point of issue is governance. The FSB is looking for recognizable legal companies or persons to be in charge of the global stablecoin’s functioning. This would make decentralized stablecoins difficult to implement.
If numerous entities are participating, or the stablecoin straddles jurisdiction, the governance must specify each entity’s obligations.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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Website: coincu.com
Harold
CoinCu News
Author
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FSB Provides G20 Stablecoin Recommendations
The Financial Stability Board (FSB) issued high-level suggestions for the regulation and monitoring of global stablecoin (GSC) arrangements two years ago, which the G20 supported. It revised earlier GSC suggestions today and released a similar list of crypto-asset advice, soliciting comments.
According to the FSB’s investigation, most stablecoins do not follow the criteria and must enhance their governance, risk management, redemption rights, stability procedures, and disclosures.
The crypto meltdown sparked by the collapse of the Terra stablecoin and the temporary de-pegging of the largest stablecoin, Tether, has influenced some new suggestions.
Currently, cryptocurrency exchanges are the major wallet providers, and FBS has seen that some of the exchanges are affiliated with certain stablecoins like Coinbase with USDC, and Binance with BUSD. However, the issuing is distinct from the exchanges. Circle issues USDC, whereas Paxos issues BUSD.
The FSB is worried that wallet providers may be involved in stablecoin issuance as well as off-chain transactions without adequate controls.
Another point of issue is governance. The FSB is looking for recognizable legal companies or persons to be in charge of the global stablecoin’s functioning. This would make decentralized stablecoins difficult to implement.
If numerous entities are participating, or the stablecoin straddles jurisdiction, the governance must specify each entity’s obligations.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Website: coincu.com
Harold
CoinCu News
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