IOSCO Issues Statement on Emerging Global Stablecoin Proposals
IOSCO published a statement, after its end-of-the-October meeting in Madrid, with regard to the emerging global stablecoin proposals. The Board met, among other things, to consider the risks and benefits arising from stablecoin initiatives with a potential global reach and how securities market regulation may apply to such initiatives. An assessment of the IOSCO FinTech Network concluded that a case-by-case approach is needed to understand what regulations and regulatory regimes would apply.
IOSCO has examined a number of these initiatives this year. The IOSCO Board acknowledges that stablecoins can potentially offer benefits to market participants, consumers, and investors. However, it is also aware of potential risks in a number of areas, including consumer protection, market integrity, transparency, conflicts of interest, financial crime, and potential systemic risks. To support its discussions, the IOSCO FinTech Network produced an assessment of how IOSCO Principles and Standards could apply to global stablecoin initiatives. The detailed assessment concluded that a case-by-case approach is needed to establish which IOSCO Principles and Standards, and national regulatory regimes, would apply. A detailed understanding of how a particular proposed stablecoin is expected to operate is therefore needed, including the rights and obligations it confers on participants and the continuing obligations of the sponsor.
Ashley Alder, Chair of the IOSCO Board, is of the view that stablecoins can include features that are typical of regulated securities. Therefore, certain IOSCO Principles and Standards may apply to stablecoins depending on how they are structured, including those related to disclosure, registration, reporting, and liability for sponsors and distributors. According to a statement by the IOSCO Chair, IOSCO "encourage[s] international collaboration, so the risks relating to stablecoins can be identified and mitigated and the potential benefits realized." Mr. Alder adds: "It is important that those seeking to launch stablecoins, particularly proposals with potential global scale, engage openly and constructively with all relevant regulatory bodies where they may be seeking to operate. In addition to supporting the work of the FSB, the IOSCO FinTech Network will continue its assessment and consideration of global stablecoin initiatives. The Network will also facilitate information sharing between securities market regulators on such proposals.”
Related Link: IOSCO Statement (PDF)
Keywords: International, Banking, Securities, Stablecoin, Digital Currency, Fintech Network, G20, G7, Fintech, FSB, IOSCO
Previous Article
EC Welcomes Agreement on Rules to Develop Secondary Markets for NPLsRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
