FSB published a report presenting the roadmap to enhance cross-border payments by providing a high-level plan that sets ambitious but achievable goals and milestones in the five focus areas. The focus areas of the roadmap involve committing a joint public- and private-sector vision to enhance cross-border payments; coordinating regulatory, supervisory, and oversight frameworks; improving existing payment infrastructures; enhancing data quality and straight-through processing; and exploring the potential role of new payment infrastructures, including the global stablecoin arrangements. FSB also published a report that presents high-level recommendations for the regulation, supervision, and oversight of global stablecoin arrangements, following an April 2020 public consultation. The global stablecoin arrangements are expected to adapt to new regulatory requirements as necessary, to adhere to all applicable regulatory standards, and to address risks to financial stability before commencing operation.
Within the cross-border payments roadmap, the focus area on exploring the role of new payment infrastructure will examine the scope for new multilateral platforms, global stablecoin arrangements, and central bank digital currencies to address the challenges that cross-border payments face, without compromising on minimum supervisory and regulatory standards to control risks to monetary and financial stability. The emergence of global stablecoins may challenge the comprehensiveness and effectiveness of the existing regulatory and supervisory oversight. Thus, FSB has agreed on the ten high-level recommendations that promote coordinated and effective regulation, supervision, and oversight of such arrangements to address any financial stability risks at the domestic and international levels. In addition to the final recommendations on stablecoin arrangements, FSB also published a note that summarizes the responses received to the consultation on global stablecoin arrangements and the resulting changes to the recommendations in the consultation paper.
The recommendations on global stablecoin arrangements support responsible innovation and provide sufficient flexibility for jurisdictions to implement domestic approaches. The recommendations call for regulation, supervision, and oversight that is proportionate to the risks and that follows the “same business, same risk, same rules” principle. The performance of some functions of a global stablecoin arrangement may have important impact across borders. The recommendations also stress the value of flexible, efficient, inclusive, and multi-sectoral cross-border cooperation, coordination, and information-sharing arrangements among authorities. Public consultations on the individual building blocks will take place at the appropriate points, to ensure transparency and accountability. FSB also agreed to the following further actions as a key building block of the roadmap to enhance cross-border payments commissioned by G20:
- Completion of international standard-setting work by December 2021
- Establishment or, as necessary, adjustment of cooperation arrangements among authorities by December 2021 (and as needed based on market evolution)
- At a national level, establishment or, as necessary, adjustment of regulatory, supervisory, and oversight frameworks, consistent with the FSB recommendations and international standards and guidance by July 2022 (and as needed based on market evolution)
- Review of implementation and assessment of the need to refine or adapt international standards by July 2023
- Press Release on Payments Roadmap
- Press Release on Stablecoin Recommendations
- Cross-Border Payments Roadmap (PDF)
- Recommendations on Stablecoins (PDF)
- Responses to Consultation on Stablecoins (PDF)
Keywords: International, Banking, Securities, Cross-Border Payments, G20, Roadmap, Stablecoins, Digital Currencies, CBDC, Regtech, PMI, CPMI, FSB
Previous ArticleFSB Chair Updates G20 on Ongoing Policy Work
FCA and PRA in the UK, FED in the US, and the authorities in Singapore have fined Goldman Sachs for risk management failures in connection with the 1Malaysia Development Berhad (1MDB).
BCBS announced that OSFI and the Bank of Canada hosted the 21st International Conference of Banking Supervisors (ICBS) virtually on October 19-22, 2020.
FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020.
EBA issued an opinion on prudential treatment of the legacy instruments as the grandfathering period nears an end on December 31, 2021.
ESRB published the fifth issue of the EU Non-bank Financial Intermediation Risk Monitor 2020 (NBFI Monitor).
HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.
APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity.
PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).
US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).
US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.