Regulation
FSB addresses stablecoin risks in emerging markets
THE Financial Stability Board (FSB) takes a closer look at stablecoin usage in emerging markets.
The watchdog group did this announcement following a full board meeting in Toronto.
“In emerging and developing economies (EMDEs), crypto-assets pose particular challenges for monetary policy and the management of capital flows,” the board said.
“Members discussed the challenges posed by the relatively higher adoption levels and risks of global stablecoin agreements in EMDEs. The FSB will undertake further work to consider how these challenges can be addressed.”
Reporting on stablecoin regulatory efforts last week, PYMNTS wrote that digital assets “sit at the center of the objectives of the crypto sector for a return to form.
Indeed, these assets, designed to maintain a stable value by being pegged to a reserve asset such as a fiat currency or a commodity like gold, aim to offer the benefits of cryptocurrencies – such as security, confidentiality and fast transaction times – while minimizing prices. volatility.
The end of this month will mark the implementation of the historic European Union agreement Markets in Crypto Assets Act (MiCA) stablecoin regulations, which are 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 is occurring in a context where, until now, the bulk of government oversight of stablecoins and the crypto sector has been relatively theoretical.”
Meanwhile, the recent PYMNTS Intelligence report “Can blockchain solve the cross-border payments puzzle? argued that integrating stablecoins into a company’s payment system can provide cross-border customers with a fast, reliable and cost-effective alternative to traditional payment channels. Stablecoins can speed up transactions and reduce currency risks, making them an attractive option for international transactions.
Also last week, the FSB said it would continue to monitor the implementation of crypto regulations. introduced last yearboth within its jurisdictions and beyond.
“Given the particularly acute risk of regulatory arbitrage in the crypto space, large-scale implementation on a global scale is crucial,” the board said.