Regulation
FSB addresses stablecoin risks in emerging markets
THE Financial Stability Board (FSB) is taking a closer look at the use of stablecoins in emerging markets.
The control group did announcement following a full council meeting in Toronto.
“In emerging markets and developing economies (EMDEs), crypto-assets pose particular challenges for monetary policy and the management of capital flows,” the council said.
“Members discussed the challenges posed by the relatively higher levels of adoption and risks of global stablecoin deals in EMDEs. The FSB will undertake further work to assess how to address these challenges.”
Referring to stablecoin regulatory efforts last week, PYMNTS wrote that digital assets “sit at the center of the goals of the cryptocurrency industry for a return to form.”
This is because these assets, designed to maintain a stable value by being pegged to a reserve asset such as a fiat currency or a commodity such as gold, aim to offer the advantages of cryptocurrencies, such as security, privacy and fast transaction times, while reducing minimum price. volatility.
The end of this month will see the implementation of this European Union milestone Cryptocurrency Markets Act (MiCA) Stablecoin regulations, part of the EU’s broader strategy to bring clarity and security to the crypto-asset market. It aims to protect consumers, strengthen financial stability and fuel innovation in the digital currency space.
“By establishing clear guidelines for the operation of stablecoins, MiCA seeks to mitigate risks associated with these digital assets, such as volatility and potential market manipulation,” PYMNTS wrote.
“At the same time, the implementation of MiCA occurs in a context where, to date, most government control over stablecoins and the cryptocurrency industry has been relatively theoretical.”
Meanwhile, the recent intelligence report PYMNTS “Can Blockchain Solve the Cross-Border Payments Puzzle?” argued that integrating stablecoins into a company’s payment system can offer cross-border customers a fast, reliable and cost-effective alternative to traditional payment systems. Stablecoins can speed up transactions and reduce currency exchange risks, making them an attractive option for international transactions.
Also last week, the FSB said it would continue to monitor the implementation of cryptocurrency regulations introduced last yearboth in its jurisdictions and beyond.
“Given the particularly acute risk of regulatory arbitrage in the cryptocurrency sector, broad global implementation is crucial,” the board said.