Financial Stability Board issues stablecoin progress report

The Financial Stability Board issued a progress report on its implementation of high-level recommendations on regulating “global stablecoin” arrangements.

Details: The report says:

  • Implementation across jurisdictions is still at an early stage.
  • Jurisdictions’ different approaches could risk regulatory arbitrage and market fragmentation.

Guidance: The Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions this week separately issued joint guidance clarifying that international standards for payment, clearing, and settlement systems apply to stablecoin arrangements.

Next: The U.S. President’s Working Group on Financial Markets is expected to issue recommendations on regulating stablecoins as soon as this month. Meanwhile, the Federal Reserve Board is working on a separate report to seek public input on stablecoins and a U.S. central bank digital currency.

Background: Recent ICBA blog posts detail growing stablecoin risks to consumers and the financial system, how policymakers are responding, and what decentralized finance means for community banks.