On 18 October 2019, the Financial Stability Board (FSB) published an issues note on the regulatory issues concerning stablecoins. The note was delivered to G20 finance ministers and central bank governors ahead of their meeting in Washington D.C.
The FSB warns that recent developments in the private sector involving the launch of stablecoin-type arrangements for domestic and cross-border retail payments, with the potential to reach a global scale, could alter the G20’s current assessment that crypto-assets do not pose a material risk to financial stability.
At the same time, according to the FSB, the emergence of global stablecoins could provide benefits to the financial system, and broader economy, as they have uses in cross-border payments and remittances by a large number of users in different countries. To harness these potential benefits, while containing associated risks for the financial system, adequate and comprehensive regulatory and oversight arrangements are required to ensure that any potential risks to financial stability can be identified and adequately addressed.
In order to implement the G20 mandate on monitoring developments in crypto-assets and remaining vigilant to existing and emerging risks, the FSB will:
- take stock of existing supervisory and regulatory approaches and emerging practices in this field, with a focus on cross-border issues and taking into account the perspective of emerging markets and developing economies;
- consider whether existing supervisory and regulatory approaches are adequate and effective in addressing financial stability and systemic risk concerns that could arise from the individual components of a stablecoin arrangement or their interaction as an ecosystem as a whole; and
- advise on possible multilateral responses, if deemed necessary, including developing regulatory and supervisory approaches to addressing financial stability and systemic risk concerns at the global level.
The FSB intends to submit a consultative report to the G20 in April 2020, and a final report in July 2020.