Regulatory interest in stablecoins comes on the heels of efforts by governments to launch central bank digital currencies.
A meeting attended by financial chiefs from the world’s 20 largest economies called for increased scrutiny of the stablecoin industry as part of broader global regulation.
The fourth meeting of finance ministers and central bank governors of the Group of Twenty (FMCBG), which took place in Italy this week, ended with different decisions on the best way for governments to address the issue of stablecoins, noting that proper regulation was necessary, even as various countries moved forward with their digital currencies. issued by central banks or central bank currencies.
According to finance and central bank officials of the G20, the stablecoin industry must meet all legal and regulatory requirements before it can be approved.
“We reiterate that a so-called ‘global’ stablecoin business should not start operating until all relevant legal, regulatory and supervisory requirements have been adequately addressed through appropriate design and adherence to applicable standards.” , The group said in a Report.
The G20 report on FMCG acknowledges that much has been achieved so far as the international community seeks to revolutionize cross-border payments. The report notes that the global economic recovery depends on a A well-functioning digital infrastructure.
However, policy makers believe that more can be done to address the challenges of using stablecoins, including issues of transparency, cost, and speed. They also touched on the topic of security, noting that the sector can have an impact on the global monetary system.
According to the report, adjustments to regulatory approaches and implementation of supervisory standards will enable different governments to align with the Financial Stability Board (FSB) roadmap. This body, which was established in 2009, is responsible for overseeing the global financial system and aims for coordinated regulation, supervision and oversight of the sector by 2027.
Meanwhile, the UK and the US are some of the world’s top destinations for digital assets already interested in the stablecoin market. There have been calls for the creation of digital currencies for the central banks of these two countries, but China appears to be leading in this race, with its yuan digital currency reaching an advanced stage of deployment after a massive crackdown on mining and mining. Cryptocurrency trading.