BIS issues guidance on regulation of stablcoins

BIS issues guidance on regulation of stablcoins

The Bank for International Settlements (BIS) has published a report with guidance on the compliance of stablcoin mechanisms with international standards for payment, clearing and settlement systems.

The Committee on Payments and Market Infrastructures and @IOSCOPress report proposes guidance on how certain aspects of the PFMI could be observed by #stablecoin arrangements in light of their novel features #BigTech @IOSCOPress

The public consultation document was presented by the Committee on Payments and Market Infrastructure (CPMI) and the International Organization of Securities Commissions (IOSCO).

"This report marks significant progress in understanding the implications of stablocoins on the financial system and provides clear and practical guidance on the standards they must meet to maintain its integrity," said IOSCO chairman and Hong Kong Securities and Futures Commission CEO Ashley Alder.

The institution recalled that in 2019, the G20 Financial Stability Board (FSB) undertook work to examine the global impact of "stable coin" arrangements and made recommendations for their regulation.

A preliminary analysis conducted by the CPMI and IOSCO as part of the October 2020 FSB report found that the Principles for Financial Market Infrastructures apply to StableCoin arrangements.

In a published document, the BIS framework confirmed this definition. The report provided clarification and interpretation of the application of existing standards to stablocoins.

"This consultation document is part of the international regulatory community's ongoing commitment to ensure the principle of 'same risk, same regulation', to identify potential risks and to help develop appropriate standards to protect financial stability," stressed CPMI Chairman and Deputy Governor of the Bank of England John Cunliffe.

As a reminder, the BIS has previously noted that many central banks are looking at digital assets from a regulatory perspective, but they are most interested in stabelcoins.

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