CPMI published a report that investigates the impact of global stablecoins. This report by the G7 Working Group on Stablecoins finds that stablecoins, regardless of size, have implications ranging from anti-money laundering efforts across jurisdictions to operational resilience (including for cyber security), consumer or investor and data protection, and tax compliance. Global stablecoins may amplify the challenges and could also pose challenges to competition policy, financial stability, monetary policy and, in the extreme, the international monetary system. The report lays out initial recommendations for private-sector stablecoin developers and for public-sector authorities to address the challenges and risks.
The report provides an overview of the stablecoin ecosystem and the need to improve payment systems and services. It details the regulatory, oversight, and policy issues associated with stablecoin initiatives, highlighting the challenges inherent in global stablecoins. The report also provides a preliminary review of existing regulatory and oversight regimes that may be applicable to stablecoins and sets out the way forward, including improvements to cross-border payments. The G7 Working Group on Stablecoins recommends that relevant public stakeholders, in collaboration with the relevant international organizations, develop roadmaps for supporting and scaling up ongoing efforts to improve the efficiency and inclusiveness of payment and financial services. The roadmaps could include recommendations to:
- Support initiatives to improve cross-border payments
- Promote financial inclusion by reviewing and updating the call for action by all relevant stakeholders and by boosting support programs for less developed countries
- Improve coordination between authorities, both domestically and across borders, including through strong regulatory cooperation and harmonized standards and through information-sharing and cooperative oversight arrangements between relevant authorities
FSB and the standard-setting bodies are intensifying their efforts to assess how the existing principles and standards could be applied to stablecoin arrangements and to develop new policy recommendations for stablecoins in a globally consistent and coordinated manner. Additionally, the Working Group recommends that public-sector authorities continue to underscore regulatory expectations with global stablecoins arrangements. The Working Group welcomes the plans of FSB to work with standard-setting bodies to assess whether there may be regulatory gaps around global stablecoins and to deliver its findings to the G20. Finally, the Working Group recommends that finance ministries, central banks, international organizations, standard-setters, and other public authorities maintain the high level of international coordination and collaboration needed for cross-border policies and regulatory regimes that apply to stablecoins. Public authorities should also be mindful to forestall harmful regulatory arbitrage and to ensure a level playing field that encourages competition.
Related Link: Report
Keywords: International, Banking, Securities, Stablecoins, G7, Cross-border Payments, Recommendations, Financial Stability, Global Stablecoins, CPMI
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