The G20’s Financial Stability Board (FSB) has again stressed on the recommendation of regulating ‘global stablecoins’ (GSC) in a recent report published on Tuesday.
The recommendations go in line with the previous 10 standards for stablecoins suggested by the board in April.
The FSB wants the implementation of international regulatory standards in national jurisdictions, which include effective cooperation, coordination and information-sharing arrangements.
“GSC arrangements are expected to adhere to all applicable regulatory standards and to address risks to financial stability before commencing operation, and to adapt to new regulatory requirements as necessary,” the FSB highlighted.
The board also published a roadmap to complete the international setting-standard work by December 2021. Nations need to establish the standards by July 2022 and then review and assess their need another year.
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Stablecoins Must Be Regulated
Though the growing adaptation of stablecoin was a point of concern among the international and national regulators, the regulation of these fiat-pegged digital currencies became a priority after Facebook revealed its plan to launch Libra.
Despite that Facebook formed a non-profit to oversee the stablecoin that is supposed to be used across its platforms, the project faced massive regulatory backlash and has to postpone its initial launch deadline.
G7, the body of the seven major economies, opposed the launch of Libra, in the latest meeting draft, until the digital currency meet all the regulatory standards, Reuters reported.
“The G7 continues to maintain that no global stablecoin project should begin operation until it adequately addresses relevant legal, regulatory, and oversight requirements through appropriate design and by adhering to applicable standards,” the draft noted.
Meanwhile, central banks started to see the feasibility of launching the digital version of the fiat, and many began to test these central bank digital currencies (CBDCs). Japan, South Korea, and several European nations have drafted proper roadmaps for the CBDC testing.