Regulatory focus on stablecoins follows government’s moves to introduce digital currencies from central banks
A meeting of finance chiefs from the world’s 20 largest economies called for stronger oversight of the stablecoin sector as part of a broader global regulatory framework.
The fourth G20 meeting of Finance Ministers and Central Bank Governors (FMCBG), held in Italy this week, concluded with various resolutions on how governments should best approach the issue of stablecoins. It found that appropriate regulation is needed even as various countries make progress on their central bank-issued digital currencies (CBDCs).
According to G20 finance and central bank chiefs, the stablecoin sector should have all the legal and regulatory requirements in place before being approved.
“We affirm that no so-called ‘global stablecoins’ should commence operations unless all relevant legal, regulatory and supervisory requirements are met through appropriate design and compliance with applicable standards.”according to the group in a report.
The G20 FMCBG report recognises that the global community has already achieved a great deal in revolutionising cross-border payments. The report notes that the economic recovery of the world from a “well-functioning digital infrastructure” abhängt.
However, policymakers felt that more could be done to address the challenges of using stablecoins, including issues of transparency, cost and speed. They also raised the issue of security, noting that the sector could have an impact on the global economic system.
According to the report, regulatory adjustments and the implementation of prudential standards will bring the various governments into line with the roadmap established by the Financial Stability Board (FSB). Established in 2009, the body is tasked with overseeing the global financial system and aims to achieve coordinated regulation, oversight and oversight of the sector by 2027.
Meanwhile, the United Kingdom and the US are two of the world’s leading locations for digital assets that are already dealing with the stablecoin market. There are calls for CBDCs in both countries, but China seems to be taking a frühe Führung in this race, as its Yuan CBDC is in an advanced phase of introduction after a crackdown on crypto mining and trading.
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