The Bank for International Settlements has authored a detailed stablecoin report that sheds light on the various aspects of stablecoin regulations in the crypto industry.
Stablecoin regulations have recently become an essential subject of discussion among the crypto community and regulators. The Bank for International Settlements, a global body of central banks, also published a stablecoin report, providing multiple suggestions. The BIS’s recommendations mainly include supervision, regulation, and oversight of stablecoins.
The report initially underlines the growing popularity and use cases of stablecoins. At the same time, the BIS report also highlighted the need to mitigate risks arising from stablecoins. The report suggested creating a ‘global stablecoin (GSC), ’ spanning multiple jurisdictions. The BIS also took the definitions for various terms related to stablecoins in the document from an earlier FSB report.
Further, the BIS explained its suggestions and said, “The high-level GSC recommendations aim to address financial stability risks posed by GSCs, both at the domestic and international level, while supporting responsible innovation and providing sufficient flexibility for jurisdictions to implement domestic approaches.”
The BIS recommendations ranged from regulatory powers for authorities to effective cross-border coordination and cooperation. Moreover, the BIS specified that a GSC should have governance and risk framework structures. On the other hand, the BIS suggested having a robust data reporting, access, and storage plan. Recovery, resolutions, and redemption are featured in the list of other subjects for suggestions.
Meanwhile, the BIS recently announced tokenization and other CBDC projects as well. The announcement was worthwhile as it noted the body’s active support for the crypto industry. Besides, stablecoin regulation plans have also progressed in the UK and the US.
A UK senior government official spoke about their work to enact a stablecoin law soon. In the US, the Treasury Secretary urged Congress to introduce stablecoin regulations soon.
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