BIS issues recommendations on regulating stablecoins

The Bank for International Settlements (BIS) published a report with guidance on aligning stablecoin mechanisms with international standards for payment, clearing and settlement systems.

The public consultation document was presented by the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO).

«This report marks significant progress in understanding the implications of using stablecoins for the financial system and provides clear and practical recommendations on the standards they should meet to maintain its integrity», — said Ashley Alder, chair of the IOSCO Board and CEO of the Hong Kong Securities and Futures Commission.

In 2019, the Financial Stability Board (FSB) of the G20 conducted work to study the global impact of stablecoin mechanisms and issued recommendations on their regulation.

A preliminary analysis by the CPMI and IOSCO as part of the FSB’s October 2020 report showed that stablecoin arrangements fall under the Principles for Financial Market Infrastructure.

In the BIS document, the framework reaffirmed this definition. The report offers clarifications and interpretations of applying existing standards to stablecoins.

«This consultative document is part of the international regulatory community’s ongoing commitment to the principle “same risk, same regulation,” to identifying potential risks and helping develop appropriate norms to safeguard financial stability», — emphasised the Chair of the CPMI and Deputy Governor of the Bank of England, John Cunliffe.

As noted earlier by BIS, many central banks are studying digital assets from a regulatory perspective, but their greatest interest lies in stablecoins.

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