Central banks across the world have set out to create a set of rules for stablecoin currencies like Facebook’s Libra to operate in. They think that a more common approach is required for all the existing and upcoming stablecoin currencies to ensure stability. They added that more rules may be required in the future as the currencies progress.
The Financial Stability Board (FSB) said the current set of national rules do not cover stablecoins which are not bound by borders. They added that the regulators need to ensure that global stablecoins are fully accountable, keep customer’s data safe, and have effective safeguards in place against cyber attacks or money laundering.
The FSB drafted a resolution of its recommendations in April and presented it to the public for consultation and critique.
Stablecoins are very efficient as they are not bound by banks which follow a slow and expensive process. Since stablecoins can reach in different areas with separate regulatory bodies, there needs to be a set of rules in place and a supervisor to oversee their practices.
The committee will report in December 2021 whether further changes are required in the rules currently set. Another review of the regulation of stablecoins will be completed by July 2023 according to the FSB.
Online shopping legislation and consumer protection laws incoming