|
Stablecoins are cryptocurrencies designed to have a stable value
relative to traditional currencies, or to a commodity such as
gold, to avoid the volatility that makes bitcoin and other
digital tokens impractical for most commerce.
Facebook Inc's move in 2019 to introduce its own stablecoin
Diem, then known as Libra, raised concerns among governments and
central banks that a major payments competitor could emerge
overnight with little regulation.
Since then, Diem has radically scaled back its ambitions and
plans to launch a U.S. dollar stablecoin.
The IOSCO group of securities regulators and the Bank for
International Settlements, a global forum for central banks, set
out on Wednesday how current rules for major clearing,
settlement and payments services should also be applied to
'systemic' or heavily used stablecoins.
The proposals, put out to public consultation before being
finalised early next year, put into practice what regulators
have long called for: the same rules for the same type of
business and accompanying risks.
The rules mean a stablecoin operator must set up a legal entity
which spells out how it is governed and manages operational
risks like cyber attacks.
Though still little-used for commerce, the use of stablecoins in
crypto trading has grown rapidly as retail and larger investors
warmed to the emerging asset class during the COVID-19 pandemic.
Tether, the largest stablecoin, has a market capitalisation of
around $68 billion versus just $15 billion a year ago. The value
of circulating USD Coin, another major stablecoin, has also
jumped dramatically to over $30 billion from just $2.7 billion a
year ago, according to CoinMarketCap.
Countries that allow stablecoins to operate would be required to
apply the principles as part of their affiliation to IOSCO and
the BIS.
"This report marks significant progress in understanding the
implications of stablecoin arrangements for the financial system
and providing clear and practical guidance on the standards they
need to meet to maintain its integrity," IOSCO Chair Ashley
Alder said in a statement.
The proposals do not cover issues specific to stablecoins pegged
to a basket of fiat currencies, which are being considered
separately.
(Additional reporting by Tom Wilson, editing by Giles Elgood)
[© 2021 Thomson Reuters. All rights
reserved.] Copyright 2021 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
